unemployment

In Zwelitsha, Eastern Cape Province, South Africa, unemployment is high, families are large, and the standard of living is low. Many people live in poverty, and as there is a high birth rate and large proportion of young people, the problem is likely to intensify in the future as the growing population seek food, housing, and employment.

Lack of paid employment. The unemployed are usually defined as those out of work who are available for and actively seeking work. Unemployment is measured either as a total or as a percentage of those who are available for work, known as the working population, or labour force. Periods of widespread unemployment in Europe and the USA in the 20th century include 1929–1939, and the years since the mid-1970s. According to a report released by the UN's International Labour Organization November 1995, nearly 1 billion people, about 30% of the global workforce, were out of work or underemployed. The reduction in job opportunities was said to be due to lower growth rates in industrialized countries since 1973, and the failure of most developing nations to recover fully from the economic crisis of the early 1980s. The ILO argued that despite increasing worldwide competition, the 1996 jobless figures were neither politically nor socially sustainable. Unemployment in industrialized countries (the members of the Organization for Economic Cooperation and Development (OECD)) in 1995 averaged 7.5%, and in the European Union (EU) 11.1%. Within the OECD group the country with the lowest percentage of unemployed in 1995 was Japan (3%) and the highest was Spain (22.6%).

Unemployment is, generally, subdivided into frictional unemployment, the inevitable temporary unemployment of those moving from one job to another; cyclical unemployment, caused by a downswing in the business cycle; seasonal unemployment, in an area where there is high demand only during holiday periods, for example; and structural unemployment, where changing technology or other long-term change in the economy results in large numbers without work.

Many countries in the developing world suffer from severe unemployment and underemployment; the problem is made worse by rapid growth of population and lack of skills. In industrialized countries, the rise in world oil prices in the mid-1970s caused a downturn in economic activity, and greater use of high technology has improved output without the need for more jobs. There continues to be a great deal of youth unemployment despite government training and job creation schemes. In the USA the official unemployment rate was 5.1% in 1996 (6.8 million), but it is estimated that 20% to 25% of those who want employment cannot find any (and have never had a job or are out of work longer than unemployment compensation is paid, so are not counted by labour statisticians). In China, nearly a quarter of the urban labour force is unemployed.