Unemployment – Loss of Valuable Productive Resources

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Department of Statistic Malaysia in its report release on 8th May 2020 stated that Malaysia unemployment rate is at 3.9%

Unemployed persons increased by 17.1 per cent to 610, 500 as compared to 521, 300 in the same month in 2019.

The unemployment rate in March 2020 increased to 3.9 per cent. The high unemployment rate in March 2020 reflects the negative impact of MCO on the labour market.

Unemployment is a major life event.  It can have a devastating impact on people’s lives.

It affects not just the unemployed person but also family members and the wider community.

Unemployment is a term referring to individuals who are employable and seeking a job but are unable to find a job.

There are few situation when unemployment occur. One of it is during recession when there is a reduction in the demand for products or services offered in the market.

Organisation that produce or supply those products and services will most likely cut back on their production, making it unnecessary to retain a wide workforce within the organization. In effect, workers are laid off.

Another situation is when people moving between jobs – frictional unemployment.

There is also a structural unemployment. It happen when the skills set of a worker does not match the skills demands of the jobs available or if the worker cannot reach the geographical location of a job.

Due to the loss of income, unemployed individuals will be unable to earn money to meet financial obligations.

Unemployment can significantly cause social problems.

Because of the increased spare time and stress there will be an increase in the rates of alcoholism, drug abuse and domestic violence. Moreover, high unemployment often results in increased marriage breakdown, divisions and discrimination in society, suicide rates and crime rates especially among the young (Garry Ottosen and Douglas Thompson, 1996).

Unemployment also affects a person psychology. Numerous studies have revealed a relationship between unemployment and lack of self-esteem and confidence leading to depression.

Quite apart from the personal impact, unemployment is a loss of valuable productive resources with all that implies for economic growth and the standard of living of the whole community.

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