1. Introduction

Unemployment

Unemployment is defined as the state of not having work when one is available for work and has actively searched for a job in the preceding one month. Unemployment usually takes place when the economy is on a downward swing.  Less economic wealth is within the country so comparatively fewer individuals are needed to produce goods and services and therefore little amount is paid to the employees, which can lead to an increase in unemployment rate. The following four activities constitute the term “searching for a job”:

• Applying for an interview for a job with a potential employer, or contacting family members and acquaintances, or contacting an employment center;
• sending personal curriculum vitae to places of employment that currently have openings;
• answering an advertisement published either in the newspaper or by any other means for a job; and
• any other means that may be considered as actively searching for a job. (Bureau of Labor Statistics, 2014)

Long-Term Unemployment

Long Term unemployment rate is defined as the state of joblessness while being available and actively looking for work for more than 27 weeks. Long term unemployment is considered to be a fragment of structural unemployment, i.e. unemployment caused by the following factors:

• When the person looking for work does not have the skills required to perform the jobs offered by the employers;
• when the person looking for a job lives in an area where there are no jobs available matching their skill level; or
• Other barriers in finding a job which cannot be solved. (Shierholz, 2014)

2. Effect of Long Term Unemployment

The most prolific and damaging effect of unemployment on individuals is that the entire period of long term unemployment contributes towards the erosion of the actual skill of such individual such that when such person is eventually employed, they would not be able to work at the same proficiency as they would have had their not been a long period of unemployment. Further, along with the passage of time, the unemployed person’s network of contacts within the industry diminishes which in a circular manner contributes may lead to additional period of unemployment. (Austin Nichols, 2013)

 

3. Unemployment and Ethnic Minorities

Unemployment levels are usually not evenly distributed across different demographic and all across Europe, a key element towards securing a job has been the ethnicity of the individual. Historically, higher levels of unemployment have been observed for ethnic minorities such as Muslims compared to the normal levels of unemployment for the country. Europe has traditionally been home to a very huge number of immigrants for a variety of reasons ranging from natural acts of destruction to those which are political and religious in nature.

In recent times, the major reason for continued high levels of unemployment despite policies to counteract the same include the fact that most ethnic minorities such as Muslims usually migrate to foreign countries within Europe as a result of which, they are not well-versed in linguistic and other cultural matters. Another factor is the lack of education and formal training. Employers inherently prefer individuals who would not need to be trained prior to starting work. Further, in a post 9/11 world, anti-Muslim sentiment may also play a factor while considering applicants.  (Macharashvili, 2012)

Even in the United Kingdom, the unemployment rate for ethnic minorities has been 14.2% with consistently low employment rates for colored individuals and Bangladeshi & Pakistani females, with even lower levels of participation in the labor market by immigrants seeking asylum. According to research, the first generation of ethnic minorities in predominantly white countries is less successful at finding employment than their children.

These ethnic minorities are usually not well-represented in managerial positions across corporations and a significant restriction in continued employment for these minorities has been found to be low human capital and lack of education and academic prowess. Another key reason for sustained unemployment has been the lack of fluency and control of the English language.

Another important barrier has been the archetype gender roles that have been traditionally been established for generations in the homelands of such ethnic minorities. An example would be Pakistani women being unable to find work due to their traditional roles for caring for children and taking care of housing responsibilities.

An often unheralded reason for elevated unemployment rates for ethnic minorities can best be described as the ethnic penalty. Discrimination often takes place while considering applicants as ethnic stereotypes often color the perception of employers. This can even lead to members of the ethnic minorities restraining themselves and avoiding applying for jobs. Vacancies may also be advertised only through verbal dissemination and published in predominantly English newspapers due to ethnic discrimination. (National Audit Office, 2008)

4. Effect of Unemployment on Physical Health

Long term unemployment can have multiple key effects on the individual’s quality of life as in the absence of any other income, family savings are eroded. Further, prolonged period of joblessness cultivate an atmosphere of stress, helplessness and unease within the mind of the individual which can effect performance in any future job interviews.

Negative effects are observed on the children in a family where the father or mother is unemployed. Usually, infants in such a situation weigh less than infants born in households not facing unemployment.

In some cases, unemployment also affects the earning of the second generation from households facing unemployment. Lack of medical insurance due to loss of income may also affect the physical well-being and appearance of the children. (Austin Nichols, 2013)

Unemployment has often been cited as a cause of psychological distress. Any time an individual is unemployed for multiple years, an estimate earnings decrease of approximately 25% is suffered by them. Furthermore, individuals unemployed for an extended period of time often find themselves in comparatively lower paying jobs upon being reemployed, as well as less authority and lower occupational designation compared with their former jobs. Interactions with family members with newer patterns may emerge including needless quarrels and verbal abuse. Unemployed individuals may also suffer from lower morale, lower levels of self-acceptance and may grapple with dissatisfaction and depression. (Burgard, 2007)

5. Impact of Unemployment on People’s Ability to Access Services and Participate in the Community

Due to reduced income, quality of education afforded to the children reduces; the quality of the consumable goods that can be purchased reduces which also affects the health of individuals and their families. It has been estimated that a total of 10% reduction in the benefits would lead to approximately 1% reduction in expenditure for household items. (Crossley, 2001)

The decrease in expenditure is less than the decrease in income as individual and their households use borrowings or utilize savings or due to mortgage of properties. Families sometimes avoid much needed expenses facing long-term employment. Medical expense is a common expense which is cut down while an individual is unemployed. An approximate 63% of families in such a scenario skip visits to the dentist, 56% avoided getting much needed medical procedures and 40% did not fill a prescription. (Austin Nichols, 2013)

6. Impact of Unemployment on the Wider Community

Negative effects have historically been observed in communities where unemployment runs rampant. High rates of family breakdowns are often seen in communities with high unemployment rates along with an increase in the crime. Persistent joblessness in a community may lead to persistent poverty across generations. A significant concern is always that joblessness may lead to frustrated individuals turning to illegal activities such as drugs, theft or prostitution. A 14% higher probability is estimated for arrest among people who have been left unemployed due to the closing of a plant. (Austin Nichols, 2013)

7. 2008 French Reforms of Unemployed Support

French President Nicolas Sarkozy introduced this reform for unemployment benefits and supporting policies for those actively searching for jobs. This policy merged the French organization responsible for allocating benefits for the jobless (formerly UNEDIC) and the organization responsible for finding jobs for unemployed people actively searching for work (formerly ANPE). Pôle Emploi, the new organization was formed for the main purpose of clarification of an administrative nature.

The reforms mainly dealt with the problem of unemployment in the following manner:

• Each applicant would be allotted a single advisor who would help the unemployed individual for all bureaucratic and job-seeking endeavors;
• the advisor would also make contacts with companies on behalf of the applicant and also enroll the applicant in various relevant trainings and seminars; and
• the benefits are also contingent on how willing the applicant was accept the offers by the advisor.

The Pôle Emploi organizations have been widely criticized for being under-staffed and unhelpful along with the lack of resources, particularly in poor neighborhoods with especially high unemployment rates. The French Government has often claimed that for every 100 applicants, one advisor has been allocated, however, in multiple cases, disproportionate numbers of advisors were allocated to the applicants in minority areas. Up to 600 people have been reported to have been allocated to a single advisor. (Macharashvili, 2012)

On May 6, 2008, the Ministry of Economy had a meeting with relevant social partners and presented a draft bill on job offers. The bill also specified that after 90 days of joblessness, the individual would not have the option to refuse two consecutive jobs which pay at least 95% of their previous employment in a radius of 30 kilometers from their homes. Also, after 180 days of unemployment, the individuals would not have the option of refusing two consecutive jobs paying at least 80% of their former jobs. And after 12 months of unemployment, the individuals would not be allowed to refuse a position which pays 57.4% of their previous job.

The bill clarifies that individuals would have their unemployment benefits revoked in the event of two such refusals and have their names taken off the unemployment registers.

The bill has been criticized by the representatives of the trade unions calling it unfair and unhealthy stating that the cuts went too far, albeit, in a direction which was necessary. However, the bill has also been praised by people such as leader of General Confederation of Labour, Jean-Christophe Le Duigou praising the efforts of President Nicolas Sarkozy. (Ira, 2008)

8. Conclusion

The effects of prolonged unemployment are far-reaching and affect many facets of the individual and household life with far-reaching implications on the overall community. Loss of income, lower morale, depression, permanently lower quality of life, and a higher mortality rate are only some of the negative effects from an individual standpoint, while job loss for parents can and does affect quality of education for the children. While an elevated rate of crime is the most potent ill-effect from a community stand-point.

While reforms are being made globally, an increased level of commitment, dedication and attention is required by the governments to ensure gradual reduction in levels of unemployment.

 

Bibliography

Austin Nichols, J. M. (2013). Consequences Of Long Term Unemployment. Washington DC: Urban Institute.

Bureau of Labor Statistics. (2014, June 12). Labor Force Statistics from the Current Population Survey. Retrieved January 26 1, 2015, from Bureau of Labor Statistics: www.bls.gov/cps/cps_htgm.htm

Burgard, J. E. (2007). Effect of Job Displacement on Social Participation. Chapel Hill: Institute for Social Research.

Crossley, M. B. (2001). The Life-Cycle Model of Consumption and Saving. Journal of Economic Perspective , 3-22.

Ira, K. (2008, May 31). French government prepares new cuts in unemployment compensation. Retrieved January 26, 2015, from World Socialist Web Site: http://www.wsws.org/en/articles/2008/05/fran-m31.html

Macharashvili, E. C. (2012). Franco-Dutch Unemployment Among Muslim Minorities. Georgia: Tbilisi State University.

National Audit Office. (2008). Increasing Employment for Ethnic Minorities. National Audit Office.

Shierholz, J. B. (2014). Lagging Demand, Not Unemployability, Is Why Long Term Employment Remains So High. Washington DC: Economic Policy Institute.