5 Top Reasons for Unemployment in the World

Unemployment is a drag on the global economy. What are the top reasons for unemployment in the world? Let’s find out 5 top reasons for unemployment in the world.

“No country, however rich, can afford the waste of its human resources. Demoralization caused by vast unemployment is our greatest extravagance. Morally, it is the greatest menace to our social order.”

– Franklin D. Roosevelt

Unemployment Background

Are you struggling to earn a livelihood? Are you unemployed at the moment? If so? Then you are in the right place.

So what are the key reasons for unemployment globally? What can you learn to improve your employability? 

World average unemployment rate is 10.3% in 2020 (source World Population Review). However, the impact on livelihood is more acute in developing countries. Key reason being inadequate social security infrastructure.

Below worldwide graph shows unemployment in percent.

Also below is 2020 unemployment rate of G20 nations in descending order (source Trading Economics). So how does your country look like?

5 Top Reasons for Unemployment in the World

Lack of Adequate Education

Education is a fundamental building block. Therefore, without adequate education, the foundation is missing. This is by far the biggest challenge. This applies to both basic education and higher education.

Basic Education

Developing and underdeveloped countries struggle more with it. Social-economic constraints primarily drive this. In many poor countries, children do not have access to primary education.

Higher Education

Quality higher education is the cornerstone of good-paying jobs. We should orient it towards industry needs. And many times we do not gear it towards industry needs. In addition, higher education can be expensive. So not everyone can afford it. Very few countries provide free university education. Germany is one of them.

Lack of Employable Skills

A lot of times the education system doesn’t teach employable skills. As a result, students are not industry ready. So what are the options? First, students need to know what skills the market needs. Second, they need to find avenues to learn those skills. Third, industry also needs to sponsor upskilling.

Lack of Preparedness to Search Work

Job market is competitive. Therefore, one needs to search and learn where to look for. Apart from full-time employment, there are lots of freelancing opportunities as well. These opportunities are available both onsite and remote. Besides searching, one needs to learn how to prepare as well. These include resume writing, language skills, and communication skills.

Social Stigmas and Willingness to Work

Are social conditions conducive for everyone to work? Is everyone willing to work?

For instance, in India, which has 1.37 billion people in 2019 (source World bank), only 20.3% of women are in the workforce compared to 76.0% men in 2020 (source ILO). The reasons for such disparity are multifold. This is because of first, social stigmas around women working; second, gender inequality; and third, not all women will work.

In addition, not everyone of either gender will do any job. They don’t treat all jobs equally. This is because of stereotypes about all work. And their relative social status.

Data shows that persons with higher education have higher unemployment rates. In 2019, unemployment for graduates is 16.3% and below primary education is 1.8% (source Statista).

Willingness to Take Risks

Do we take risks? To get the job we want. Not always. Because it may need moving out of our comfort zones.

Lack of Enough Job Creation

Population

High population drains resources. So job creation needs to outpace workforce addition.

Governance

In addition, jittery governance impedes job growth.

Economic Policies

And inconsistent economic policies don’t create jobs.

Conclusion

In conclusion, our employment is in our hands, mostly. It depends on how industrious we are. And what barriers we are wiling to break.

What do you think are the reasons for unemployment? Your thoughts?