Unemployment

The rapid deterioration in economic conditions has resulted in a sea change between clients and employers. Whereas contractors and employees had an abundance of opportunity and the clients and employers were paying premium rates and in some case were being exploited the opposite is the case. Contractor prices which were affecting affordability have been corrected through the scarcity of work. A client that can afford to build can do so at excellent rates, regardless of procurement strategy. Whereas previously clients were concerned with affordability, now the concerns are sub-economic bids, post-contract claims, supply chain instability and lack of contractor initiative (ibid). It is important to note that the effect of the recession is not felt equally across nations, regions and industries; it is though a general trend.

Underbidding: There are significant risks to a client going for sub-economic bids, underbidding is a strategy employed by struggling firms to stay afloat, in the current economic climate this strategy is increasing. Some bids are so low that the contractors are buying the work at a loss. In 2010 Connaught won a housing maintenance contract worth 17.5 million, the bid was challenged in court by Morrison as being abnormally low at 5.5 below their bid. Connaught eventually went bust and this had a detrimental effect on the client who paid much higher costs to replacement firms on emergency contract. (David Matthews, 2011)

Underbidding can be a strategy to stay afloat or a strategic decision to acquire work and then reclaim money by exploiting loopholes and squeezing the suppliers. According to Constructing Excellence only 47% of projects finished on price, the contract is the start and not the end of negotiations. (ibid) Underbidding and trying to claw back through the supply chain is contrary to the advice of the Latham Report as it breaks trust rather than building it.

Clients and contractors are critical stakeholders and the dynamics of their relationship is pivotal to project success, clients have a responsibility to ensure contractors are capable of fulfilling contractual obligations and therefore must be rigorous in their assessment of bids. Bids that are significantly below others need proper scrutiny. A positive relationship and outcome to projects will not be achieved by awarding work to companies who may be intent on clawing back revenues through squeezing margins of others, it is high risk.

Whereas in recessions of old government intervention might have attempted to stimulate the public sector, there is less buoyancy in this sector. Significant programs of work have been scrapped or significantly downsized such as the 15 Billion Building Schools for the Future programme. Furthermore turmoil in the stock market will potentially dampen private sector demand. When Chancellor Osborne outlined a 83 Billion cut in public sector spending in October 2010 contractors were naturally weary on the impact on public sector clients (O’Sullivan, 2011). In response to events many companies are adopting retrenchment strategies, cutting operating costs and divestment of non-core activities. An employer under pressure to compete will look inwards, into the organisation, the purpose to drive down overheads, increase efficiency, there may be job cuts, wage cuts, reduced investment.

This streamlining is inevitable to remain solvent. In construction projects this pressure will be felt down the supply chain, through to sub-contractors, designers, suppliers of materials, plant and labour, it is an inevitability of the so called invisible hand of market forces, the outcome of reduced demand. The plight of employees is shrinking purchasing power due to reduced income and higher inflation, the effects of the weakening currency, also the threat of redundancy and unemployment, for the self-employed less work and lower rates. According to the public sector client survey public sector clients have been saving funds by cancelling projects. Following the Comprehensive Spending review 58% of new projects were shelved, local authorities cut 63% and the health sector 44%. This reduction in jobs naturally leads to an increase in competition by contractors. (ibid)

The coalition government has signalled that a move away from framework agreements is desired to enable SMEs to access work, in defiance, unwittingly or not, public sector survey clients are turning to frameworks to save money, 40 % of housing associations joined over 6 months in 2011. (o’Sullivan, 2011). Framework relationships, a case study Dean Engel and Andrew Murphy are land surveyors employed by Balfour Beatty. An account of their experiences provides an interesting insight into the compound effects of cutbacks on the framework agreement EMAC contract servicing the Highways Agency Area 2 Contract. Andy is a long time employee of the company with 18 years of service; Dean is a relative newcomer with 5 years of experience with the company.

According to Andy prior to the credit crunch Balfour Beatty (BB) had an issue with training graduates and retaining them as they swapped companies to attain promotions and higher incomes. BB Staff packages were very competitive so more could be earned elsewhere. The situation now is that BB retains staff more easily says Andy, this seems logical; where there is less demand in the workplace loyalty may carry more weight especially if there is risk of redundancies.

Andy has benefitted from consistent and often generous pay increases, he has a final salary pension, a company car with fuel card, is satisfied with his income, employment status and the investment the company has made in him while employed and is now a chartered surveyor. He has benefitted from training courses and has a good annual leave entitlement. The company has clearly made efforts to retain him and has been successful in doing so.

Dean has had a different experience having been employed after the credit crunch when the company recruitment policy altered to reflect circumstances. BB now has an abundance of graduates and can select high quality individuals on competitive packages while the rate of staff retention has improved according to Andy. Both Andy and Dean have had their incomes pegged back, last year there was no pay increase while this year there has been a 1.9% increase. Andy’s income increased steadily over his first years of service whereas Dean’s has been suppressed due to the economic circumstances and he has not been offered a final salary pension. Also Dean has not been promoted through the grades as quickly as was previously the case because of the increased staff retention and subsequent lack of promotion opportunities.

According to Andy Balfour Beatty has a significant order book, with ample major projects on the horizon such as the high speed rail link, and major on-going works such as the M25 widening scheme, a 700 million sewerage processing works announced on the 4th Jan 2012, to name but a few. In defence of Balfour Beatty they are scrutinising costs and overheads to remain competitive, on this contract they have a public client in the Highways Agency who are themselves under pressure to reduce costs. The experiences of these men are interlinked with the wider economy and their experiences are probably shared by many. As Dean says, despite the disparity in incomes, the reduced holidays and pension entitlements, he believes that what he earns is competitive and he is grateful to be in employment, he does though complain that the company “takes the piss”.

The case of these two workers reflects the effects of market forces on the economy. Reduced demand and increased supply has reduced their market value, without the protection of contracts of employment they could well find themselves surplus to requirements or at the very least find their incomes reduced significantly. The construction industry is largely populated by self-employed persons who do not have the protection of employment to sustain their incomes. Frameworks are an aspect of client procurement strategy, for the contractor and supply chain they offer stability and agreed pricing models, this stability offers contractors the opportunity to invest in personnel training and inward investment in their capital base. The problem now is that clients increasingly recognise that they can acquire at lower capital costs and this disrupts stability.

Corruption

There has always been a whiff of corruption associated with the construction industry, the structure of the industry, the high level of competition, the interface of so many people along a complex supply chain. From inception to the construction a diverse array of actors can benefit from illicit backhanders, the potential for wrongdoing is immense and many fall foul to the temptation of easy money. It can be at a corporate or individual level, over recent years the Office of Fair Trading (OFT) has been immersed in an investigation to expose bid rigging, in March 2007, 57 companies and the OFT uncovered evidence of bid rigging involving over a 1000 contractors in contracts worth over �2.9 Billion (Agapiou, 2008)

Employer/employee relationships Employer/ employee relationships are affected by the recession. Unemployment, wage pressure, insecurity and increased demands by employers are factors which increasingly strain relationships. These pressures are an inevitability of the trickledown effect of reduced industry demand. According to Experian the construction sector is forecast to shrink 4% in 2012. According to one survey, employer employee relationships are at an ‘all time low’. The reduced demand on construction projects is impacting on salaries of workers. A Hays Montrose survey has pointed out that frozen salaries and salary cuts are hitting morale with half of workers surveyed stating that they are unhappy and want to change jobs within a year. Two thirds said they were overworked and 65% said they would stay with their employer if the workload was addressed. (McMeeken, R, 2011)

The UK construction economy has traditionally suffered from a skills shortage. The Egan report, 1998 identified a “crisis in training” trainees had dwindled by half since the 1970s. (Egan, 1998). Construction is a labour intensive industry despite technical developments. The skills and commitment and organisation of employees are of vital importance in producing a good quality product. Egan identified a commitment to people as a fundamental driver of change in the industry.

ABSTRACT

This paper examines the causes of unemployment in Nigeria as well as the consequences and implications of graduate unemployment in Nigeria. The paper also provides useful suggestions and recommendations on how to curb graduates in Nigeria. The paper adopts empirical analysis to examine the causes of unemployment in Nigeria. The data used in this study is of two type of primary and secondary data. However, for the primary data, the questionnaire was used to solicit responses from the respondents. In conclusion economic recession, governmental policy, employment of expatriates, and trade union wage demand increase the rate of unemployment. The study emphasizes that planning for human resources uses in Nigeria has been based on guesswork and must be re-evaluated.

I. INTRODUCTION

Economists are unable to agree on the causes of or cures for unemployment (or anything else, it seems). The essence of the Keynesian explanation is that firms demand too little labor because individuals demand too few goods. The classical view was that unemployment was voluntary and could be cleared by natural market forces. The neo-classical theory is that there is a natural rate of unemployment, which reflects a given rate of technology, individual preferences, and endowments. With flexible wages in a competitive labor market, wages adjust to clear the market and any unemployment that remains is voluntary. The latter view was held by Milton Friedman and strongly influenced government policy in the early 1980s, but without success. There is, of course, no simple explanation of unemployment and no simple solution.

Unemployment can conceive as the number of people who are unemployed in an area, often given as a percentage of the total labor force. These categorical of persons or people are actively looking for paid employment without success under the prevailing economic condition. Unemployment is the greatest challenge for underdeveloped and developing countries. the phenomenon of graduate unemployment ( GU) as it is being experienced in the developing countries constitute a peculiar problem to the labor market and the general economy of these countries. From the content analysis perceptions of job seekers on the issue of graduate unemployment in a study conducted by Fajana (2000), the following factors were identified as the major causes of unemployment in Nigeria: the long period of initial unemployment among university graduates in Nigeria, faulty manpower planning and expansion of educational facilities that have unduly raised the expectations of Nigerian youths, the economic recession, continued proportionality of expatriates in employment, the institution of NYSC, the collective bargaining process, graduate attitude to some type of jobs attitude to jobs in other location as well as search behavior of employers and job seekers, use of capital intensive technology, wide rural-urban migration, formal-informal sectors differentials. All these and many other factors contribute to the causes of graduate unemployment in Nigeria. The objective of this paper is to critically evaluate all these factors so as to determine their impacts on graduate job seekers in Nigeria and other LDCs. The purpose of this paper is to examine all the various factors that contribute to graduate unemployment with the view to provide suggestions and solutions on how to curb the problem of graduate unemployment in Nigeria. This paper will also examine how the actions of the industrial relations actors contribute to graduate unemployment in Nigeria.

This paper intends to achieve the following:

1. To identify the causes of unemployment in Nigeria.
2. To examine the consequences and implications of graduate unemployment in Nigeria.
3. To provide useful suggestions and recommendations on how to curb graduate unemployment.
4. To provide the framework for further studies in this area.
5. To provide guidelines and information for policy formulation in curbing unemployment in Africa.

II. LITERATURE REVIEW

Fajana ( 2000), and Standing( 1983) opined that unemployment can be described as the state of worklessness experienced by persons who are members of the labor force who perceived themselves and are perceived by others as capable of work. Unemployed people can be categorized into those who have never worked after graduation from the university and those who and those who have lost their jobs thereby seeking reentry into the labour market. However, most of the previous study on unemployment of youths especially of graduates unemployment in developing countries have tended to ignore the special case of the university graduates that are first-time job seeker. This study makes an attempt to focus on the university graduate first job seeker. According to William (1976), the meaning of work to paid employment is the result of the development of capitalist productive relations. However, according to Fajana (2002), the concept of work has partly shifted from productive effort itself to the predominant social relationship. For instance, it is only in the sense of social relationship that a woman running a house and bringing up children can be said not to be working.

UNEMPLOYMENT IN NIGERIA: TRENDS

After the 1967-1970 civil war in Nigeria, the incidence of graduate unemployment was suspected, rumored and feared. In this regards professor Diejomaoh ( 1979) in a study conducted at the human resource unit of the University of Lagos found that the incidence of graduate unemployment between 1965 and 1972 was not a serious problem contrary to what is being dreaded. Similarly, Folayan Ojo ( 1979) attributed whatever level of graduate unemployment ( presumably small ) during the period 1965-1972 to slow bureaucratic machinery for the processing of an application for jobs, and the influence system might have caused some graduates to remain temporarily unemployed for the first few months after graduation. However, at that time, there had been a shortage of medical doctors, graduate teachers, and engineers while agriculture graduate is under-utilized. However, the trends have changed greatly from the late 1970s to date. Currently, the number of universities has increased and their curricula have expanded.

UNEMPLOYMENT IN NIGERIA: CAUSES

The yearbook of labor statistics (1984, 1985, 1986) reports that the unemployment rate has generally risen during the worldwide recession of the 1980s and 90s. The rational steps taken by most management to cope with the recession includes a ban on recruitment. Since graduates are mostly first job seekers, this practice of natural wastage, which involves the refusal to fill vacancies imply that graduates directly hit. The annual reports of the civil service commission ( 1981,1982) show that overseas recruitment was carried out ostensibly because of the absence of qualified Nigerians to fill some technological and professional jobs. This may have contributed to the problem of unemployment in Nigeria. Contrary to this, Fajana (2000) argued that the presence of expatriates in jobs may not cause graduate unemployment. Nevertheless, this factor becomes very important when solutions to the problem are being sought.

One of the measures adopted by governments in developing countries as part of their policy package to solve manpower problems is the establishment of national youth service programs. The National Youth Service Corps (NYSC) in Nigeria came into being in 1973 in response to the particular urgent needs of fostering national unity, a means of recouping government investments in graduates. Unfortunately, the NYSC scheme has encouraged employers (private and public) to shy away from employing graduates. It can be said that it has contributed to graduate unemployment in Nigeria. The labor decree (1974, section 19) protects older workers from being laid off in a situation of redundancy. As labor and management make an attempt in trying to cope with the recession, they adopt the policy of last-in-first-out, coupled with the ban on recruitment during the recession. These seemed to have combined to exert a great impact on the employment situation for graduates trying to seek first jobs. Industrialization in Nigeria has been pursued haphazardly with little or no attention paid to manpower development implications of the adopted strategies. For instance, 7 after independence, a battery of incentives were offered to industrialists to lure foreign investment into Nigeria. But, the industrialists that came were capital intensive in their operation and could not absolve the proportional size of the growing labor force in gainful employment.

PSYCHO-SOCIAL EFFECT OF UNEMPLOYMENT

Graduate initial unemployment and idleness have adverse psychological, social, occupational, and financial effects on them Fashoyin (1987) and Fajana (2000). unemployment has serious effects both on their present living conditions and their outlook in the future and on the society in which they are supposed to be part. Unemployment is the undoing of graduates because it literally destroys them morally and rapture the ties and relationship they form. People who have no jobs feel insignificant and inferior. And always having the feeling that they are ostracized from the rest of the society, and most often they are regarded as parasites by other people. In most societies, conventional work ethic suggests that unemployment is unwelcome because of the special role and meaning work has. In particular, young people in this situation feel that they must find work, no matter what. At the beginning of the search period, they look for jobs suited to their qualifications, training, or trade but later on, they look for any kind of work, and any kind of pay. Unemployment and underemployment may cause people to flee the rural areas, move about or migrate. The later effect will tend to explain some of the current wave of brain drain to the advanced countries from the less developed world.

III. METHODOLOGY

The data used in this study is of two type of primary and secondary data. However, for the primary data, the questionnaire was used to solicit responses from the respondents. It has been structure objectively, considering the time lag and its relative advantage to minimize cost. The questionnaire is divided into two main parts i. e. part I and part II. Also, interviews were conducted among graduate job seekers. Part I seeks personal data of the respondent ranging from age, sex to educational qualification. These were used to compare the characteristics of the sample with that of the population. Part II is structured basically o delve into the opinion of the respondents so as to have a logical yardstick to refute or accept our research hypothesis. The population of this study was Stronix Consults Nigeria Limited (SCNL). SCNL is a recruitment and employment firm with a focus on recruitment, selection, and placement of job applicants into different organizations. The total number of a job applicants including unsolicited applications is 1500 job applicants. This number is assumed to be the study population and 10 percent of this number was used as the sample size which is 150. A stratified sampling method was used for this study. The stratified methods group the population into some definite characteristics (strata). This is suitable for the purpose of this research as it makes it possible for our random selection to be done across all disciplines (Art/Humanities, Sciences, and Education). As mention, earlier the data for this study was collected basically through the questionnaire and interview method. The questionnaire was administered at randomly among job seekers. The study population consists of unemployed graduates in Gbagada, Lagos.

IV. RESULTS SPSS

Data analysis was used to test the hypothesis for this study. The major hypotheses tested are as follows: 9 Hypothesis one H0: Governmental policy, economic recession, employment of expatriates, and trade unions wage demands do not significantly contribute to the rate of unemployment in Nigeria.

H1: Governmental policy, economic recession, employment of expatriates, and trade unions wage demands significantly contribute to the rate of unemployment in Nigeria. Hypothesis two H0: rural-urban migration, the imposition of minimum wage, and influence system does not significantly contribute to the rate of unemployment in Nigeria. H1: rural-urban migration, the imposition of minimum wage, and influence system significantly contribute to the rate of unemployment in Nigeria.

Reference

1. Beer , W And Herves M. E. A ( 1966).
2. ‘ Employment And Industrialization In Developing Countries’, Quarterly Journal of Economics, Vol. 30 No. 1 Bhalla A. S ( 1973).
3. ‘ A Disaggregative Approach To Employment In Less Developed Countries ‘ The Journal Of Development Studies Berg, E. J. (1969).
4. ‘ Unemployment In Nigeria: An Economic Analysis Of Scope, Trends And policy Issues ‘ Nigerian Journal Of Economic And Social Studies Vol. 13 no. 2 Pp 127-160 Berg, E.J 9 (1969).
5. ‘Urban Real wage And the Nigerian Trade Union Movement (1939-1960: a comment’ Economic Development and Cultural Change, (EDDC), VOL. 17 NO. 4 Fajana, S. (1987).
6. Economic Recession, Collective Bargaining, And labor Market Segmentation In Nigeria, Nigerian Management Review CMD, Lagos, Vol. 2, No 1, P9-16 Fajana, S (2000).
7. Functioning Of the Nigerian Labour Market, Labofin and Company, Lagos, Nigeria. Fashoyin, T. ( 1980).
8. Industrial Relations In Nigeria, Macmillan, London Fashoyin, T. ( 1987).
9. Collective Bargaining In Public Sector In Nigeria, Macmillan, Lagos. Falae, S. O ( 1971),’ unemployment In Nigeria’ Nigerian journal of economic and social studies, vol. 3, no1, march. Kilby, P ( 1967).
10. Industrial Relations And Wage Determination: Failure of the Anglo-Saxon Model, Journal of Developing Areas ( JDA), Vol. 1 No. 14, July. Kilby, P. ( 1969).

It is important for every employee to ensure that his or her performance is constantly and substantially adept in order to ensure career growth and job security, in order to reap the benefits that he or she would rightfully deserve. However, there are circumstances beyond one’s grasp that can affect an employee’s work performance. As such, recession is one of the factors that may affect the performance of every employee within a company. During recession, the Human Resource Department of the company should think of strategies to keep their employees intact and assure them of benefit plans.

Recession is perhaps one of the serious problems a company can face. It is usually characterized by an extended decrease of activity in the workplace. To address issues and concerns during a recession period, some American companies have thought of ways to save corporate budgets, while operating in margins (McIntyre, 2008). In particular, the Financial Executives International has already reported how serious and how bad things are during a recession period. With the trends that are being caused during recessions, the reactions of big corporations against the slowing economy are easy to predict.

Some possibilities that companies resort to include cutting job hiring processes, decreasing the capital spending, deferring Research and Development funds, and in worst case scenarios, freezing the payment for the employees. These actions will make recession deeper as suppliers will tend to cut costs. Employee Retention Recession is a bad omen for companies and businesses. In most cases, although senior managers would feel hesitant of letting go of their competent employees, most of the employees feel anxious of losing their jobs. 

Learn which of the following circumstances usually comes before a period of economic contraction?

This kind of situation adds to the managers’ and employees’ worries on financial and job security, which often leads to deteriorating focus on their jobs (Craig, 2008). A study has revealed that four workers out of five caught amidst a recession period were not able to work at their optimal level, and as such, two out of the five employees “checked out. ” With the looming recession, workers’ fears hit the ceiling and it distracts other workers. This means that recession greatly affects the productivity of workers.

This serves as critical news especially to a company that struggles for margins during bad times. However, rewarding the workers well and appreciating them will keep their productivity from waning (Craig, 2008). If the company has to let go of some workers, it should let go of the ones who it can afford to lose. Thus, managers must be able to skillfully and carefully determine those that the company needs most in order to gain stability. Another way to survive is to monitor the company’s competitors.

Since workers that are good and competitive are at a premium, competitors might try to pirate them from the company. This is why it is important that managers think about the long term service and assessment of every employee. They should put in consideration how long the recession may last, and how many workers they will need when the economy gets better. Managers should avoid the mistake of getting rid of good employees who are productive and efficient in their works.

One of the hindrances that a company may undergo is being short-staffed after the economic downturn, or finding out that the people they hired after recession are second rate and less competent than the ones that they have let go of. Thus, it is very important for managers to know how they can “attract, engage, develop, and retain talent for high performance” (Ceplenski, 2008). Communication is also one important aspect that must be maintained during a recession. Communication within a corporation entails more than taking the initiative to send out e-mails to the employees.

To ensure good communication with the employees, it is better to round them up for their questions and adequately answer the employees’ queries. The management, at all times, must be present to address the workers’ concerns (Craig, 2008). It is necessary for the company management to ensure their employees that their welfare is one of the top priorities of the company. As such, managers must make it a point to update their employees about the developments and to acknowledge and recognize their loyalty and efforts for the company or organization.

What factors have led to the development of the British welfare state? The British welfare state has an impact on our lives on a daily basis and has been transformed since its initial developments in the early 19th century. I will be exploring the social, economic and political factors that led to the development of the British welfare state up to 1945, and I will assess the most dominate features at the time and those that are still prevalent within the current welfare system today.

The historical origins of the British welfare state can be dated to Elizabethan times with the introduction of the Poor Law (1601) which dealt with welfare at a local level. This was the first instance where the government attempted to ensure that the poor had the means to live. This continued until the impacts of the Industrial Revolution called for changes in the provision for the poor. From the late 18th century British society was being transformed through economic and industrial growth.

There was a revolution in the use of land in the production of raw goods, and technological advances in the use of machinery and the manufacture of goods. The state allowed markets to operate freely without regulation. There was also a mass migration of people moving from towns to the cities seeking employment. Many of these people were dependent on employment within the factories and on the assembly lines. Although there were many benefits from industrialisation on the economic front, urbanisation created a large concentration of people in many areas, his lead to major problems with health and housing.

In addition, when jobs were no longer available, men were unable to support their families. The family unit was often broken with most fathers travelling many miles to their place of work. Many women and children were also forced to find employment as a result of being widowed and orphaned. Poverty, unemployment along with many other social issues became a recognised problem within the new urban communities. In line with these economical and social changes there were also changes taking place within the political sphere. The growth of political democracy and ‘the centralisation of governmental powers’ (Pierson.

C 2006, p16) led to more competition between the British liberal and conservative political parties in of the time. It could therefore be suggested that political forces helped to shape the welfare state. It can be argued that developments in state welfare were a direct response to some of the problems generated by the changing nature for society through industrialisation and the social risks related to this. The Poor Law amendments (1834) meant that only those who were really in need, for example the poorest paid workers would receive support.

These reforms differentiated between the ‘deserving’ and ‘undeserving’ poor. Individuals were expected to ‘submit to degrading and shameful procedures to receive any benefit.. thus only the completely destitute, would be prepared to come forward for help’(Blakemore. K 2003, p42). The workhouse was introduced to force people to work in order to receive their benefits. This transformed public attitudes to towards poverty, whereby being poor and dependant of benefits became shameful and those receiving support were increasingly stigmatized.

Other laws were also passed such as the Factory Act (1883) which aimed to reform the working conditions of factory workers by ‘legally enforcing a ten-hour day and rules governing the employment of children’(Alcock. C 2006,p19). This Act especially focused on women and children, and also enforced health and safety regulations, in addition, employers had to comply with educational classes for employees during the working day. At this point, it is evident that although state involvement was limited because of the dominant liberal principals of the time.

Yet, there were the beginnings of a new beauracratic approach in state intervention. The Boer Wars (1880-1881,1899-1902) were fought between Britain and Holland as part of Britain’s empire building mission. The economic and human cost was evident following the two wars. Britain was faced with a country that needed rebuilding and a population that needed comfort and confidence from their leaders. The wars also highlighted the extent of poverty and poor health within the unskilled labour classes which showed that there was a strong need for welfare reform.

Following these wars, David Lloyd George and his Liberal Party enacted the National Insurance Act 1911 setting up a national insurance contribution for unemployment and health benefits such as sick pay and maternity pay. The government introduced limited unemployment benefits, with old age pensions, and job centres available to help people find jobs, paid for by national insurance contributions and income taxes. Although this scheme was limited, it offered greater social welfare provision than the previous Poor Laws.

However, benefits were subject to a contribution basis, and those benefits would run out once the contributions were used. ‘The scheme was not designed to provide widespread relief in a period of mass unemployment’ (Hill. M 2006,p24). Although this act appeared to have some benefits, there were also many issues, and the majority of people were not able to could not cope financially without being able to work. Most of these policies remained in place throughout the first world war (1913-1918) and the Great Depression.

However, during World War I, Britain experienced conscription for the first time and this lead to changes within the workforce as many women took up employment in a range of roles to support the war effort ‘the beneficial effects of regular employment, longer hours and rising wages was offset by rapidly rising prices of essential goods’ (Thane. P 1996,p120). It can be suggested here that the effects of the wars called for immediate changes in the welfare state especially in relation to unemployment, health, housing and disability benefits. The Labour Government of 1945, were determined to eliminate poverty, ill health, and social deprivation.

Their social and economic policies were driven by the party’s own ideals and long-term objectives. William Beveridge was a government adviser to Winston Churchill. He filled his report and made recommendations about reforms to the provision of welfare. Beverigde based the principles of his report by seeking to ‘establish a unified universal social insurance social system’ (Thane. P 1996, p 232). This led to the introduction of many social security schemes including the National Insurance Act 1946 and the National Assistance Act 1948, which dealt with sickness and unemployment benefits and retirement pensions.

These acts and reforms formed the basis for the welfare state that has been accomplished over time. From the early 18th century, there was a mixture of factors that lead to the development of the welfare state in Britain. These reforms and developments in welfare provision were a direct response to economic, political and social changes taking place at the time. Welfare reform persists to change today within its current framework, and continues to respond to these factors which are often interlinked and constantly shifting. References Blakemore,K. (2003) Social Policy: An Introduction (Open University Press) Burnett,J. 1994) Idle Hands: The Experience of Unemployment 1790-1990 (Routledge) Hill,M. (2000) Understanding Social Policy (Blackwell) Fraser,D. (1984) The Evolution of the British Welfare State: A History of Social Policy Since the Industrial Revolution (MacMillan) Goodin, R. E. , & Mitchell, D. (2000). The Foundations of the Welfare State, Part I, London: Edward Elgar Publishers Pierson,C. (1998) Beyond the Welfare State: The New Political Economy of Welfare (Polity Press) Pierson,P. (2001). The New Politics of the Welfare State, Oxford: Oxford University Press. Thane, (1982) The Foundations of the Welfare State in Britain 1945-1960 (Longman)

This paper will discuss the viability of increasing wages to attain higher productivity rates in the workplace. I will argue that implementing a wage increase for current employees will not necessarily result in higher productivity and that productivity is more so a function of innate skills and abilities than pay rate. Costco claims they receive high productivity rates in return for paying their employees high wages. This does not necessarily mean that implementing a wage increase at a chain like Sam’s Club, owned by Wal-Mart, for current employees will provide the same productivity results.

Currently Wal-Mart and its subsidiaries operate on the mission of “Always Low Prices, Always” (81). Wal-Mart achieves these low prices through “low wages for its employees, unrelenting pressure on suppliers, products cheap in quality as well as price, (and) offshoring jobs”(81). Cascio argues that there may be an alternative to the way that Wal-Mart runs it’s business where they are able to offer low prices while paying employees well and providing desirable returns for shareholders (81). Cascio bases this argument on the premises that Costco, a store with similar objectives to Sam’s Club, is able to successfully run a profitable business not at the cost of employee wages, quality of product, return to shareholders, or profits (81). Costco believes that providing higher wages results in higher productivity (82).

On average they pay their employees $6.89 higher than Wal-Mart employees and provide above average benefits yet most agree that they are still the lowest cost provider (82). Costco is also very concerned with quality of product; when purchasing merchandise they seek out value that they measure by the product quality rather than the price, a differing tactic from that of Wal-Mart (84). Even with higher than average wages and benefits to shareholders Costco provides good returns to it’s shareholders where in a 5 year comparison between Wal-Mart and Costco, Costco saw 45% more growth than Wal-Mart and traded at 24.8 times expected earnings, 7.4 times higher than Wal-Mart (84).

Lastly, in providing good wages and benefits to employees, low costs to customers on quality products, and creating value for shareholders, Costco saw revenues of $43.05 billion, 5.95 billion higher than Sam’s Club with 38% less employees (87). Cascio argues that Wal-Mart need not pay their employees low wages to keep shareholder returns high and suggests that by paying their workers higher wages they should be able to reap the benefits of more productive workers (82). This argument is flawed especially if productivity is viewed as a function of innate ability instead of pay.

It is possible that Wal-Mart is able to employ workers at a lower wage than Costco because the pay matches a more inferior set of skills and abilities that their employees have explaining why the people they hire are willing to work at this wage. If this is the case then giving a pay raise, as it will not specifically increase workers’ skills, may not result in an increase in productivity for Wal-Mart. If Wal-Mart were to increase pay without seeing an increase in productivity it would lose profits resulting in a lower return for shareholders, something that would be seen as an irresponsible and unethical decision for a public company whose duty is to create value for shareholders.

Although it may be true that an increase in wage will not increase productivity in current workers, Wal-Mart has the option of seeking new employees who have skills and abilities that prove to be more productive than those of current workers and attracting them by offering higher wages. Offering increased wages will attract employees with higher skill levels who would be unwilling to work at the lower wage previously offered. In pursuing this option Wal-Mart will be able to reduce their workforce over time through employing more productive workers at a higher wage thus offsetting the increased labour costs. Since the productivity benefits of the new workers will outweigh the cost of increasing wages Wal-Mart can continue to provide sufficient returns to shareholders and will operate effectively as a responsible public company.

While it may be an option for Wal-Mart to increase their productivity by attracting more skilled workers through higher wage incentives this course of action proves to be unethical on a few fronts. Firstly, by hiring new workers at a higher wage current workers will become displeased as they may interpret it to be unfair even if the pay is based solely on skill. Also, by employing new, more productive workers, the average skill level of the workers hired at Wal-Mart will change meaning that an outlet of employment for lower skilled workers has been taken away and may result in higher unemployment for people who fall in this skill level. If unemployment rates for less skilled workers were to increase it might cause an excess need for social welfare programs.

Essentially, if Wal-Mart changed it’s hiring practices to employ more skilled workers they may take away jobs from people currently qualified to work there, possibly hurting communities it chooses to locate itself in if. Although Costco may believe that it sees high productivity rates because of its high wages it may not be easy to implement this in already existing workplaces. It would be socially irresponsible of Wal-Mart to increase wages if it resulted in angering current employees, taking jobs away from them, or increasing the need for social welfare in communities that it operates within. Although there may be an alternative to the way that Wal-Mart operates in creating low prices for consumers, a wage increase for employees in expectations of higher productivity is not the best solution.

Works Cited

Cascio, Wayne F. “Decency Means More than “Always Low Prices”: A Comparison of Costco to Wal-Mart’s Sam’s Club.” Academy of Management Perspectives (2006). Rpt. in Ethical Theory and Business. Ed. Tom L. Beauchamp, Norman E. Bowie, and Denis G. Arnold. 8th ed. Upper Saddle River, NJ: Pearson/Prentice Hall, 2009. 80-90. Print.

In the world Libya is noted to have the highest rate of unemployed citizens. In Nigeria we have the problem of unemployment it has become a major problem. Unemployment Rate in Nigeria increased to 23. 90 percent in 2011 from 21. 10 percent in 2010. Unemployment Rate in Nigeria is reported by the National Bureau of Statistics. From 2006 until 2011, Nigeria Unemployment Rate averaged 14. 6 Percent reaching an all time high of 23. 9 Percent in December of 2011 and a record low of 5. 3 Percent in December of 2006.

In Nigeria, the unemployment rate measures the number of people actively looking for a Job as a percentage of the labor force. John Maynard Keynes who was once a dent of Alfred Marshall introduced what he thought would completely solve the unemployment problem which is called the Keynesian unemployment, from the sass’s to sass’s government tended to follow the Keynesian policy on how to control the economy and because the need for the solution to unemployment was essential

Unemployment

Unemployment can be expresses either as a number (e. G. 1. Million) or as a percentage (e. G. Per cent). But we should consider the group of people who are out of Jobs which are those of working age who are without work, but who are available Keynesian economics By Fridays-Alee people who are lacking Jobs. Keynesian economists think that in recessions a sizable fraction of unemployment. Unemployment increases because more people are hunting for better Jobs during recession, not because they cannot find Jobs. If it is to be expressed as a percentage, then it is the percentage of the total labor force.

The labor force is defined as: those in employment (including the self-employed, those in the armed forces and those on government training schemes) plus those who are unemployed. Thus if 22. Million people were employed and 2. Million people were unemployed, the unemployment rate would be: T There are three main categories of unemployment. They are:

Structural unemployment

This is a serious type of unemployment where the labor demand is less than the supply in an individual labor market economy.

Under the structural unemployment there are sub types; one example is the regional unemployment this is said to be of existence when there is a lack of mobility of factors of production between the regions. During the post-war period, the South of England has tended to be at full employment while regions such as Northern Ireland have constantly suffered from unemployment. Another example is the sector unemployment, shipbuilding and steel industries declined harshly in the late sass’s and early sass’s leaving a substantial number of skilled workers unemployed.

Unfortunately their skills were no longer desired in the economy rendering them unemployed and without retraining and possible transfer, they were therefore unable to adapt to the varying demand. Technological unemployment is another example under the structural unemployment; this is when groups of workers across industries may be put out of work by new technology. Again, with no retraining and geographical mobility these rockers may stay unemployed. Cyclical or demand-deficient unemployment This is a type of unemployment which could also be referred to as Keynesian “demand deficient” unemployment.

Economies tend to face business cycles; these are activities from boom to recession over time. This type of unemployment occurs when the economy is not on boom. It is when there is inadequate aggregate demand in the economy for all workers to get a Job. In a recession not Just the workers get unemployed but the capital too is neutralized, so factories and offices can stay vacant and machineries and equipments will lie idle. According to Lain Anderson cyclical unemployment is caused by a lack of demand in the economy, Frictional, seasonal unemployment and structural unemployment are caused by supply side effects.

Frictional unemployment Most workers who lose their Jobs move fast into fresh ones. This is a type of transitional unemployment because of the way people move between Jobs, For example, newly superfluous staff or workers getting into the labor market (such as graduates of the university) may take time to find proper Jobs at wage rates they are Defective information in the labor market may worsen the frictional unemployment f the unemployed are unaware of the available employment opportunities.

Some of the frictionally unemployed may opt not to accept Jobs if they believe the tax and benefit system will decrease significantly the net increase in income from having paid work. There are disincentives for the unemployed to accept work after this happens.

Seasonal unemployment

Workers such as the construction workers or workers in a tourist industry, tend to have a seasonal routine of working. Seasonal unemployment happens to rise in the winter when some of these workers will be laid off, whilst unemployment falls in the summer when they are taken on again.

There is little that can be done to avoid this pattern occurring in a market economy where the demand for labor varies through the year. Seasonal unemployment exists because certain industries only manufacture or allocate their products at certain times of the year. Industries where seasonal unemployment is common include farming, tourism, and construction.

Assessment: Lesson 7 Preview Questions Instructions You have completed the Lesson 7 Preview Questions. Assessment Score Attempt Score: 8. 00 out of a possible 10. 00 (80. 0%) Assessment Score: 8. 00 out of a possible 10. 00 (80. 0%) Assessment Time: 2462 minutes Question 1: Economics began as a field of study in 1776 with the publication of An Inquiry into the Wealth of Nations by Points awarded: 1. 00/ 1. 00 .

Type: Multiple Choice Your answer(s): Adam Smith Correct answer(s): Jean-Baptists Say John Maynard Keynes Your Professor Adam Smith Question 2: According to Says Law: If production is created then there e sufficient funds from this creation to purchase everything that is produced. Type: Multiple Choice Your answer(s): will Correct answer(s): will not will sometimes will none of the above Question 3: According to Theory, an economy is assumed to always be at full employment (or very quickly returning to that level).

Type: Multiple Choice Your answer(s): Classical Correct answer(s): Keynesian Smithsonian Classical Traditional Question 4: In the Classical Theory, if Households decrease their spending then Businesses will reduce product prices, but will also Your answer(s): decrease wages increase interest rates

Keynesian Economics and Multiple Choice Points By Karl increase replacement inventories increase investment Question 5: Classical Theory assumes that the economy is capable of adjusting itself to full employment without Your answer(s): government price flexibility wage flexibility interest rate flexibility government Question 6: In the Classical stage of the figure below, a decrease in Aggregate Demand will only result in a movement along the Aggregate Supply line with a corresponding change in prices.

Type: Multiple Choice Points awarded: 0. 00 / 1. 00 Your answer(s): leftward rightward leftward downward upward Question 7: In the sass’s Classical Theory was unable to explain the continuing reductions in economic activity since that activity was supposed to be restored through interest rates, wages and prices.

Type: Multiple Choice flexible Your answer(s): rigid flexible fixed Question 8: A Bathtub model of the start of the Great Depression would show the water level becoming lower with Investment inflow being less than Savings leakage and, therefore, quantity of AD being Your answer(s): less than Correct answer(s): less than quantity of AS. The same as Question 9: In this example of the Classical adjustment process, a recession seems to e starting with Business Investment spending declining by billion dollars because of pessimism regarding profit opportunities in the short run.

Points awarded: 0. 00/ 1. 00 Your answer(s): 400 Correct answer(s): 100 200 Question 10: In this example of the Classical adjustment process, the recession is avoided when is increased by $100 billion which effectively offsets the decline in Business Investment spending. Your answer(s): Consumption spending by Households Correct answer(s): deficit spending by Government import spending by Foreign Markets Consumption spending by Households Saving by Households