Brief introduction to Unemployment and 5 year (2007-2012) unemployment stats in BRICS countries.

1. Unemployment
&
5 year analysis in BRICS
Group 9
Ashish, Pawan, Prateek and Sai Chandan
IIM Shillong
Class of 2013
Great Depression – “The Migrant Mother”

2. Intro
• Occurs when people are
without jobs and they have
actively sought work within the
past four weeks.
• Measurement (% Unemployed
to Employed)
• Causes
• Consequences
• Solutions
Translation: “Diligent young man seeking work”

3. E theories
• Keynesian Economists –
Cyclical Nature, Govt.
intervention
• Georgists – Cyclical,
Speculation in land,
Economic rent, Taxation
(Single Tax)
• Marxists – Reln owners &
workers, capitalism,
(The Depression) The Single Men's
communism & socialism.
Unemployed Association parading to
Bathurst Street United Church. Toronto,
Canada

4. Classical Unemployment

5. Cyclical Unemployment
Keynesian
• Investment – Saving / Liquidity preference – Money Supply
(IS/LM Model)

6. Marxian
• Inherent in
Capitalist
system –
reserve army of
labor
• Unemployment
– Good or Bad
The storefront sign reads "Free Soup, Coffee and Doughnuts
for the Unemployed."

7. Okun’s Law

9. SA 5 year trend
• In the short term - construction, manufacturing, and some public sector
employment down - shrinkage in exports to the EU.
• 60 % have no matric (equivalent of a high school diploma), 68 % have been looking
for a year or longer, and 44 % have never worked
• World Economic Forum: South Africa 139th out of 142 countries: 139 on hiring and
firing practices, 138 on lack of flexibility in wage setting, and 138 in
labor/employment relations.

10. Causes - SA
• Education
• Poor conditions
• Diseases
• Corruption
• Bias
• Foreigners – High
wage, High skilled
• Domestic – Low wage
Men hold placards offering temporary – Competition
employment services in Glenvista, south of
Johannesburg, October 7, 2010. (Siphiwe • Labor Laws
Sibeko/Courtesy Reuters)

11. World Bank Report, July 2012.
• “In SA, a child’s gender and
ethnicity at birth, combined
with a lack of education, largely
determine that person’s
chances of success in life —
even 18 years after the end of
apartheid.”
• “The richest 10 per cent of
South Africans account for 58
per cent of the nation’s income,
while the bottom 10 per cent
Entrance of World Bank, Source- accounts for 0.5 per cent”
GettyImages

12. Actions - SA
• Democratic Alliance plan -
Economic policy doc – 30 July
2012
• Sector Education and Training
Authorities (SETAs) – 1 April
2011
• Expanded Public Works
Programme (EPWP),09
• National Youth Development
Agency (NYDA) – Job preps,
skills, database, advisory.
NYDA @ work

14. Brazil 5 year trend
• Unemployed popn 1.4 million
• Decline in urban unemployment from 12.3% in 2003 to 9.5% in July 2007
• Service sector growth has played a major role in decreasing the
unemployment rate of Brazil
• Unemployment rate of women has shown a downward trend in recent
years

15. Initiatives
• Unprecedented social
dialogue process to
promote employment
and decent work.
• Unemployment
compensation (1986)
• Efforts to reduce
employment
discrimination against
refugees.
• Woman empowerment

17. Employment Statistics
• Employment Excel
4.35
4.3 4.3
4.3
4.25
4.2 4.2 4.2
4.2
4.15
4.1 4.1
4.1
4.05
4 4 4 4
4
3.95
3.9
3.85
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012*
• Industry wise employment

18. Comparison with BRICS

19. Comparision with Major Countries

20. Flaw
• The latest figure is well below the country's target
of keeping urban unemployment under 5% in the
2011-2015
• Official unemployment number is widely
regarded as an unreliable gauge of the actual
employment situation as it covers urban
unemployment only and excludes migrant
workers who move from rural areas to cities and
become one of the most volatile part of the
country's labor market

22. UNEMPLOYMENT RATE
The unemployment rate can be defined as the
number of people actively looking for a job divided
by the labor force.

23. EMPLOYMENT SCENARIO
• Commodity-based economy which requires the cheapest
possible workers.
• No demand for qualified workers.
• People are reluctant to take low-paying jobs.
• The number of immigrants is on the rise because
cheap, unskilled labor helps industrial companies achieve
their production goals more efficiently.
• Skills of the country’s human capital in general are on the
decline. The quality of education in the country is eroding
both in schools and universities. Russia has no systemic
shortage of personnel; but it faces a deficit of people who
are willing to work hard for unacceptably low pay.

25. Unemployment- INDIA
• India’s labor regulations – among the most restrictive and complex in
the world. Better designed labor regulations can attract more labor-
intensive investment and create jobs for India’s unemployed millions and
those trapped in poor quality jobs. - World Bank: India Country Overview
2008
• Unemployment Situation in India 2009-10, on the basis of usually
working persons in the principal status and subsidiary status,
for every 1000 people employed in rural and urban India, 679 and 75
people are employed in the agriculture sector, 241 and 683 in
services sector (including construction) and 80 and 242 in the
industrial sector, respectively.

26. Unemployment Trend
Country 2002 2003 2004 2005 2006 2007 2008 2009 2010
India 8.8 9.5 9.2 8.9 7.8 7.2 6.8 10.7 10.8
Unemployment Trend – INDIA

27. Recent Statistics
• The annual survey of the Labour Bureau has recorded 3.8 per cent
unemployment in the country for the year 2010-11, steep fall in
comparison with the earlier one which found 9.4 per cent.

28. Comparison with BRICS

29. Flaw
• Unemployment in India is characterised by chronic (disguised)
unemployment.
• Agricultural & allied sector which are backbone for
employment are neglected over the years.
• India's labour regulations are heavy even by developing
country standards.
• The 11th five-year plan has also identified the need for a
congenial environment to be created for employment
generation, by reducing the number of permissions and other
bureaucratic clearances required.
• Inequalities and inadequacies in the education system
• Child labour in India is a complex problem that is basically
rooted in poverty, coupled with a failure of governmental
policy.

30. References
• http://en.wikipedia.org/wiki/Unemployment_rate#Measurement
• http://www.africaneconomicoutlook.org/fileadmin/uploads/aeo/PDF/Confronting
%20youth%20unemployment%20-%20Policy%20options.pdf
• http://www.tradingeconomics.com/brazil/unemployment-rate
• http://www.indexmundi.com/south_africa/unemployment_rate.html
• http://wiki.answers.com/Q/What_are_the_causes_of_unemployment_in_South_
Africa
• http://www.businesslive.co.za/southafrica/sa_markets/2012/07/30/da-on-early-
campaign-trail-with-fresh-economic-policy
• http://www.psiberworks.com/Default.aspx?PageContentID=67&tabid=118
• http://blogs.cfr.org/campbell/2012/05/11/south-africas-unemployment-grows/
• http://www.forbes.com/sites/kenrapoza/2011/08/26/brazil-incomes-rise-
unemployment-falls/
• http://www.economywatch.com/unemployment/countries/brazil.html
• http://english.people.com.cn/90001/90777/90852/7416361.html

31. Xie Xie