Tag / job creation

by sheilasingapore

When The Economy Speaks … Reversing National Unemployment Statistics

6 Things A National Leader Does.

View at Medium.com
https://medium.com/series/when-the-economy-speaks-cdb62e49ad36

Peter looks down at his high school examination results transcript for the first time. It is not a pretty picture. He had been praying hard the results that would peer back at him would be different but he also knew deep down that it may not. He had been dreading this moment. It has arrived.

Still, he had wished for otherwise. He is a bright student. But it had not been an easy past few years. He had just lost his older sibling to a debilitating illness. They had been very close to each other. He is also dauntingly aware his parents are not close to each other and fears they may find other partners and break-up. What would that mean as a family? Where would he seek his counsel? Will he be intruding? That bothers him.

Turning his eyes back at the results, he knows he can do much better than what he sees. The reality is dawning at him. He is facing it squarely. These results are not going to help him get into his dream course at the university of his choice. It hurts him. What should he do now?

Suddenly he is remembering that he has to announce these results to his family. He has been known to be the one with a sound head on his shoulders. But now. With this. What would they think of him? Maybe they would not ask. He consoles himself.

But they did. He chose to keep quiet. Perhaps they will understand. He hopes. But meanwhile, he needs to come up with a strategy. Fast. So that his peers do not leave him behind.

He thinks.

He needs to get grades. Good grades. Fast. What subjects will help him do so? French. Perhaps. Grades that would help him put his foot through the door of a tertiary institution. What can he do so that he can catch up with his peers in the shortest possible time? He has the coming summer months to do so.

What jobs are out there that he should prepare for? He really did like the sounds of the field of nautical engineering. He had really enjoyed seeing and fiddling in the cockpit of a cruise ship during one of his summer vacations. It had made him feel happy and come alive. And he loves his Maths and Physics. But he has been told that manufacturing here is not a big deal in terms of jobs. What should he do? How should he decide?

Are his days of plain-sailing through life over? Will he face the same dilemmas when he out there in the big wide world looking for a job? With only four jobs available for every ten working age population, what will become of his chances with not so great grades? Supply of labour is now outstripping the demand for labour. Will jobs become too slim for his picking?

He will need to figure this out. He needs time. But does he have the time?

We all know a story like this.

One way or another.

And so. Here is the situation. You are now charged as the Head of this State. What would you do to turn around the situation?

Run, you say? Oh, you did not say that. Good! Invite more investors, locals as well as foreigners, to invest in the country?

Your predecessors have done that. Poured trillions for decades over with the help of past heads of states and a cabinet of citizen representatives. Yet, widespread unemployment today, has grown to now prevail at 60%! How did that happen?

You say perhaps “they” have not done enough. That you will do more than them. That is possible. For how long would you do more of the same? What went wrong? What else could we do?

Some measures are drastic and feels more like a bitter pill to swallow. But I hope it will make the tough actions we would need to take instead become easier to bear with. So here goes.

1. “EXPORT” UNEMPLOYMENT

Don’t have an agricultural and manufacturing bases? It has been too hard to build them? Well, no worries. Export unemployment at the same rate that we have been importing manufactured goods and the raw materials that were produced so that the unemployed follow the money you have spent buying them from outside the county (or the region).

2 “MATCH” BIRTHS TODAY TO JOB CREATION TOMORROW

If you know we will make more jobs tomorrow, go forth and multiply. But if you know, that we will not, … well, you get the drift.

A runaway population just means runaway unemployment figures that becomes hard to manage.

Supply of labour does not come from our education “system”. It is as the result of rates of births, not today, not just last year but from twenty years back. This is the time it takes for a young person to mature and readies himself for the job market.

Of course, it becomes tricky matching what happens in the bedroom today to the decisions we make in the boardroom twenty years on. The only consolation we can make is, the one who “creates” the child is the same one who plans today to “create” those jobs tomorrow. Well, no, I was not talking about God.

It is you and I. We needed to believe that we can create companies that can create those jobs for our children tomorrow. Companies are more than about hustling for clients to make money for us today or a shell to be used and discarded when we got what we need today. They are meant to create a legacy that makes jobs tomorrow. So, do you believe you can do that?

3 NATIONAL & COMMUNITY DIALOGUES AS FAMILIES Q: what allows industries to grow?

The decisions we make as nations and as families are strongly intertwined.

The decisions to be skilled for the agriculture and manufacturing sector bases are happening within families and households But the data used to inform the decision is based on what they would hear and say is happening “out there”.

If we think the population is not skilled to do manufacturing and in turn as families we think the country is not doing enough to create jobs in manufacturing then there right there, we have a lose-lose situation as a nation.

So make the intentions and the reasons clear and talk through the concerns surrounding the issue and figure a way to share the information as a nation. If countries around the world today can do grocery shopping online, this is not as big a step as we believe it to be.

Community Dialogues on household decisions and impact on national unemployment and vice-versa

4 CONSTRUCT REGIONAL MATRIX-ED GOODS VALUE CHAINS MAP

Get your backyard in order. Know what you want and go for it.

Figure what the latticed structure of chains of raw material supplies that are driven by what customers need as a region looks like and develop a vibrant agricultural and manufacturing bases:
– Do not be led by products that you have but rather focus on what customers want when building the matrix. Construct a map.
– Identify how one good feeds into another cost-effectively for end-customer needs within the local, regional and the global markets
– Know what is available. And what is not.
– Forget the who has what at this point. That is for a later stage when the map is completed.
– Focus on identifying critical processes on the chains, those if unavailable would stall the development of the production and the chains.
– Do not wait for another region to develop their maps and approach the country or the region to conduct the manufacturing for them. You will lose the clout you would need in managing the process and gaining value.

When the mapping is complete, you now have a working document to get your act together and move forward as a nation and the region.

5 ALIGN AND BUILD HUMAN RESOURCES

Align and, where needed, develop human resource skills dedicated to the agriculture and manufacturing sectors with a particular emphasis on acquiring both core across the nation and advanced skills in English, Mathematics and Science, particularly with Physics and Chemistry, that makes them resilient & inclusive in the two sectors.

6 BUILD UP THE PYRAMID OF THE ECONOMY

Concerted setup of corporations in the sub-sectors of: the agriculture (crop or plant / raw material production) and manufacturing that fits in with the regional industry value chain matrix map and schedule.

Economies that rely heavily on extraction industries will have large pockets of unemployment that continue to persist in the nation. These industries gross high returns but they do so by employing fewer people and more machines to keep costs of operations under control and growth of the industry. This way the GDP would certainly look good (but not the food on our tables, which is the real GDP).

Machines do not create jobs for the unemployment rates.

Plant and animal based primary production and manufacturing economic sectors when well-developed have greater potential for creating and absorbing significant employment. Extraction based industries are typically technology driven and has lower capacity for employment of human resources.

As the nation shifts its focus to production, particularly in plants, it will learn to mitigate climate effects country-by-country that would allow the region to produce consistently throughout the year to keep the manufacturing sector humming.

Invite regional and global industry leaders global industry leaders or; incentivise and groom local captains of industry (by long-term overseas stints) to lead, chart and build the sub-sectors bottoms-up including from within households and education sectors.

by sheilasingapore

Newspaper Column #3: Is unemployment, the real problem? The Story of Supply of Labour – Part III

As it appeared in the Sunday Standard, Botswana on  Sunday Nov 4, 2012 edition.

Labour is a cost

It can assist to generate revenue but it is firstly, a cost.  When we add them up, it can rack up into billions of dollars.  Easily.

Hence a situation of ‘that we have labour’, will not be enough reason why ‘jobs will be created’.  The jobs need to be paid.  When the money dries up, including borrowings, so does the job.  This will happen in the same way for any country.

The supply of labour however remains unchanged.  They are either more who are employed or more who are unemployed.

Next, think bottleneck.

When the supply of labour exceeds the demand for it, the demand becomes the ‘neck’ of the bottle.  It narrows the uptake of the supply. Competition and waiting for jobs are the inevitable consequences of the bottleneck.  As we release the bottleneck competition disappears.  And so would unemployment.

We would therefore require solutions on both sides of the ‘neck’ to solve the problem of persistent unemployment.

In the past two week’s editions of this column, we introduced two factors that influence persistent unemployment.  Should we create new jobs (i.e. there is demand for labour), unemployment goes down.  Should however, the numbers of births and immigration (i.e. the supply of labour) go up over time, so does unemployment.

We also discussed that the ability of sectors to create jobs is influenced by the health of profit margins of three interrelated industries, i.e. the primary, secondary and tertiary industries.   We discussed when the primary industry grows; they help to grow the secondary industries which in in turn help to grow the tertiary industries.

At this point, unemployment becomes resolved.  Hard as it may sound, it is a solution we cannot ignore.  The easy way out, would lead us back in, one way.  Back to the problem.

In today’s edition of the column, we explore the story of the supply side of unemployment and its solution.

This becomes important to help us see solutions that are digging us in deeper into the problem.  It will be ironical that what we had hoped will help the situation could actually be making them worse.  Things become better before they become worse.  At that point, we would have a situation spiralling out of hand.

A case in point is, if there are more of us than there are jobs available, skilling people without creating jobs will not make unemployment go away.  I know we do not like to hear this.  And neither do I.

Jobs do not stay vacant.  They are going to others.  And yes, while the best man may win, there is another man (or woman) out there.  That is the point.

If the problem does not budge despite resources, then it is a sign that all what we have done was to apply a solution to the consequence of the problem but not to its cause.  To deal with the cause, we would need to pull ourselves away from the fire to notice where the gas pipe is coming from.  A fireman cannot help us at this stage.

Supply of Labour

What causes the increase in the supply of labour?

One might say, well that’s easy.  It is caused by migration.  Well, that is certainly true.   For the short term.  Migration is just that.  Sometimes they are in.  And sometime they are out.

Sustained long-term increase in the supply of labour is caused by the rates at which locals add births to the population numbers within the country.   This impact is pre-determined.  It cannot be changed,  its effects are not felt immediately but they were set into motion twenty years ago.  They are felt twenty years later when the babies have grown into young adults and are about to join the employment pool of the country.

We therefore do not connect the problem to the cause since they are both distant in time and space from each other.  And when we do not see this relation, we disregard the cause and take the easier way out.  We look at immigration.  This happens for any country.

And so, if unemployment is persistent today, then this is an indication that numbers of those born twenty to thirty years ago and have now joined the labour pool, had been pushing up slowly but steadily.   Yesterday, we rejoiced each birth in our families.  Of course, we were not watching their total consequences on the nation for tomorrow.  Well, not yet.

As a nation, how many persons have we added to the pool of supply in the past forty years?  Yes, it may feel late to ask such a question.  It is meant as a way to face reality.

Let us say, should we produce 5,000 children per month, and that makes it 60,000 babies born in a year, then we can reasonably expect that twenty years from now (and 1.2 million people later), when they grow up, we would need to be preparing for an additional 60,000 jobs (given gender equality) for that cohort.

This is in addition to those already employed prior to them.  If we are seeing 30,000 retirees, we are still looking at creating an additional 30,000 or more new jobs for the cohort.  And do not forget these 60,000 do not stay at producing another 60,000.  Yes?  How many will they produce in ten to fifteen years from now?  That will become tomorrow’s reality.

How much would an additional 30,000 jobs (for that year) cost us?  Don’t forget the other years and other employees.

Who created the children?  You are right.  We did!

Who will create the jobs for them?

Creating Jobs

In a recent project on unemployment in a country, we saw the population of 35 year olds and younger, ballooned six folds in a thirty-year period.  On the other hand, job creation had not risen by anywhere near as much.  The population had disregarded these economic factors.  Of course, we can say, economic and bedroom choices do not always mix.

At rates of six-fold increases, just that layer of the population would quite easily add over another 1/3 million persons by the next generation.  These are figures before immigration.

So what is happening?

In short, we are now attempting to “fight” the problem somewhat oblivious to these realities. We saw the fire. But not what caused it! We had hoped that the supply of labour could influence the demand for labour. But that is just not economics.

Still, I wonder if, as citizens, we can totally absolve ourselves from not understanding these figures and how they play up in our everyday lives.   What do you think?

At some point we would no longer be able to shut our eyes to this.  The reality would soon wake us up, as as we see our children stay unemployed.

Have we come back full circle here?  Who designed this circle of causality?  Is this unique for one country?

What should we do today?

As citizens should we know what these numbers look like for the country?

Understanding this trends, profoundly changes the game plan in many ways.  Firstly, it allows the problem to be solved where it started (the community), not where it ended (government).  There is leverage here, as it allows the greatest changes to happen with the least amount of effort.

I have tended to believe that should citizens understand these numbers, they would become clearer at steering the country out of this problem.  Even by themselves.  These may include making choices such as coming up to speed in ways to create jobs rather than wait for jobs to be created.  Or consider seeking employment outside the country.  It is the go-getter attitude by such individuals that will eventually help draw revenue to any country and themselves.

That’s for today.  How may we better prepare ourselves for tomorrow?

Families are key

We could actually become better at matching birth with job creation rates.  Knowing these trends, may free us as families, to consider channelling resources to the building of the primary industries of the economy.  This is a strong system of production of raw materials for all levels of the economy.  Farmers, and growers of raw materials, who see this impact beyond putting food on their table for their family, are beginning to pay attention to this systemic reality.  Production is now greater than consumption in the country.

When they do so, the family is now taking a step towards ensuring that jobs are more likely to be created at other levels of the economy, for the children we produce.  We may find that as more resources are allocated to primary industry production (and less to child production) we become better at learning to manage our population numbers more in line with the capacity of the country to produce jobs for our children.  There is an order in which causality happens.

Unemployment, at that point, stops becoming a problem.

How do you see this issue?  Given the above, do we need to understand the picture that is happening for the country today?  What’s stopping families allocating resources to primary industries?

Go forward another twenty years from now.  What trends would you like to see?  For our families?  The economy?  And our country?  For employment?

Hope this inspires discussion amongst your family and friends for ways you see us resolve this issue.

English: US Whig poster showing unemployment i...

English: US Whig poster showing unemployment in 1837 (Photo credit: Wikipedia)

by sheilasingapore

Newspaper Column #1: Is unmployment the real problem – Part I

As it appeared in the Sunday Standard, Botswana on  Sunday Oct 21, 2012 edition (maiden print).

This is the 1st of a three part series of this article.  Each part will build on the earlier article to an eventual conclusion.  We invite you to participate in the column as well as do your ‘own homework’ – searching and discussing to build your own conclusions.

When unemployment persists (hard as it is to admit it is happening)

Persistent unemployment, in any country is a consequence of two factors.

The rate of increase of supply of labour (birth rates from twenty years ago) relative to the rate of increase in the demand for labour (job creation rates of today).  In jest, it is a mismatch of rates of child creation of the past vs. rates of job creation today.

Should the rate of demand for labour exceed supply year on year; we would have full employment of the locals and perhaps be able to employ foreigners as well.  However, should supply of labour persistently outgrow demand; we would now have a classic case of persistent unemployment.

When we, as citizens, learn to watch these two behaviours of change as a nation over time then we should expect to resolve the issue of unemployment.   For good.

When we don’t, and we are oblivious to the reason, all we can expect to do is to play a catching-up game but not solve the problem.  It stays on the charts as a stubborn problem, usually on the President’s table, worsening over time.  This is, despite efforts from all quarters to run ahead of the problem or get to the root of the issue.  Not to say, we hear persistent disgruntlement amongst the locals about the lack of employment opportunities for the youth or for those employed the lack of pay rises and we harbour fears of jobs being taken away by foreigners.

So,

Sustained Growth of Supply of Labour > Sustained Growth of Demand for Labour

= Sustained Unemployment

[Insert graphic here]

These two factors are not directly related to each other, but they each

 influence unemployment, separate as they may be.

But what led things to get this far?

What causes the demand for labour to decline relative to the supply of labour?  And what causes the supply of labour to increase relative to the demand for it?

First let’s explore the supply side.

Here’s a case in example.  In the ten years to 2010, Vietnam saw its population numbers grow from 80 to 89 million.  Growth of population numbers and more typically birth and migration numbers influence the supply side of this equation.  Job creation on the other hand, did not see such levels of growth.  The result is, we see runaway unemployment in the country.

Closer to home, while, population numbers in the country do not compare anywhere close to those we see in Vietnam, still when we look beyond the overall numbers, there are interesting data that we cannot ignore.

We know the overall population numbers have grown somewhat from 1.5 to 2 million levels over a decade.  Given however, the concerns of mortality rates one may conclude that our population numbers have not really changed all that much to warrant the unemployment levels we see in the country.

But realistically … has the supply of labour declined over time?

Births rates from twenty years ago, leads to the supply of labour and therefore the unemployment numbers we see today.

When we remove population and mortality figures and see our fertility rates, we may notice that these numbers have not been all that low.  In fact, typically in most populations, each generation outnumbers the previous one.  Think of population pyramid, where the numbers of young born are in numbers greater than older persons in the population.  But also see population pyramids for more recent decades assuming wider bases than those in previous ones.

Such trends are not apparent when we gloss over overall population data.  Yes, there is migration data.  But we cannot shut our eyes to these sheer levels of increase.

Do we know by how much such numbers have grown?  In the country?  In the region?

A separate question is, when should we start noticing such increases?  Would it be when the young turn 20 years old and are now looking for a job and they complain they cannot find one?

That will be too late!

We would now instead be dealing with “a fire” in our hands.  Youth unemployment rather than employment.  Yet it really is a problem that had its embers simmering for the past 20 years.  Quietly but surely.  But we were not watching it, till the embers had blown over and we now have a fire in our hands.  At this point, we say, we have a problem.  A burning platform.  But the signs were long there.  If we push this now, the system will push back.

Ok it has not.  And … has the demand for labour increased by such levels during this period?

If it has, we should not see sustained unemployment.  This is indicative that the demand for labour has not matched such levels.

How much has it increased by?  Perhaps more importantly, how much would it need to increase by?  Two-folds?  Six-folds?  What do you see are the answers?  What is making it difficult to get there?

Interestingly, should we think carefully about both sides of the equation, that is, the jobs and the children we create are influenced by the same segment of the population.  The Adults.

While perhaps we may argue that these’ activities are carried out’ by different sub-segments of the adult population, it is still the sole prerogative of this group.  The problem may not belong to any one part of this group, i.e. government or private sector or families.  That sounds like the bad news.  That it was our fault (in any generation).  But the good news is if we created the problem, then we also have the ‘power’ in our hands and in our hearts to turn it around (yes, even as a citizen) for the nation.  Together.

So is unemployment, still the real problem?  How do you see this issue?  Go forward another twenty years from now.  What would these trends look like then?

Yes, you are right given this, the reality looks painful for our children too.  But I also know, if anyone can turn this around, it is us!

The 2nd and 3rd articles in this three part series will appear in the next edition of this column.   It will seek to explore the story of the demand and supply sides of labour respectively more deeply and what causes them to either grow or decline over time.

END

#998

Countries by birth rate in 2008World map showing countries by nominal GDP per...

While this is her maiden newspaper column, Ms Sheila Damodaran is an avid writer on her blogs and website.   An international consultant in the use of systemic thinking for regional or sectoral strategy development, she welcomes feedback on her column as well as requests for types of persistent issues you wish to see discussed in her column at sheila@loatwork.com.  For more information, refer to www.loatwork.com.

by sheilasingapore

Regional Article 17: Is unemployment real?

UNEMPLOYMENT = SUPPLY OF LABOUR > DEMAND FOR LABOUR

In a country, where levels of unemployment stay persistent over time, then it is a sign that the rates of growth of the supply of labour (population numbers -” child creation”) each year is growing at rates faster than the rate of growth of the demand for labor  (job creation).  And we as a nation are not noticing these two trends.  Period.

When the supply consistently outstrips demand over time, we have persistent unemployment.  It is an unhealthy situation (as we would have with when supply of manufactured goods exceeds their demand we would have a drop in prices, when supply of rainfall exceeds demand for water, we have  rising water levels, when supply of migrant influx exceeds rate of city planning we have slums, and so on).  Unemployment is a function of how these two variables are behaving relative to each other.  Period.

And should the problem be led by the supply of labour, we need to be realistic to expect that the demand for labour (be they by job vacancies by the private (employment) or the government sectors (education, employment) will grow fast enough to overtake and get rid of the state unemployment in the country.  Seeing scenes of citizens walking the streets looking for jobs is here to stay.  Period.  Again.

What influences the supply of labor?

The rate of supply of labour is influenced by the rate of the population’s growth (i.e. procreation).  The only issue is the supply we see today of twenty and thirty-year olds in the labour market, was set into motion twenty or thirty years ago.  By the population.  The children born then have today become the youth and labour of today …. and therefore today’s unemployment.

In most cases, the populace do not see the relationship of the birth-rates of yesteryears (well pretty much like what happens between the sheets and the timing of births) and much less so their impacts on the labor supply for tomorrow.  It is and is likely to stay “unrelated” in our minds for as long as these inter-relationships are not raised and discussed by all.  Instead, our mind replaces that (“vacuüm in our) thought by fears of our survival or security for our future should “if “the one, two or three” dies or moves away tomorrow?” (this is the voice of the grandmother in the lesser developed  countries).  So, we multiply … mindlessly.

But there is a misconception and it is unfortunate!

Supply does not drive the demand for labour.  This  means, that ‘should there be excess labour’, it is not to say that the demand for labour should go up.  It could go up for compassionate reasons but not on economic grounds.  We forget that in reality, it is the demand for labour that drives its supply.  Period.

What influences the demand for labour?

I sometimes joke, it is often easier to “create children” than it is to “create jobs”.   But in both cases,  the “jobs” are done by the “same person” – Adults.  So well, how is it then that we do not see how we are attempting to solve a problem we have created by our own volition?

Also the mind that ‘looks for a job’ for oneself to feed my children, is not the mind that learns to ‘create jobs’ for others, including for our children.

So it is the fault of the ‘bosses’ for not creating jobs, or the ‘fault of the rest of us’ for not thinking about creating jobs for others (while we are busy trying to find one for ourselves)?

What influences our ability to create  jobs?

It is dependent on the propensity by the same adults of the country to grow the economy, i.e. the private sector.  It includes us defining the ability of the country (and sector / industries) to see :

  1. Capital, flow into the economy (and not the family only)
  2. Increase of the economy’s revenue and
  3. Reduction in the costs of running the economy
  4. Diversification of the economy (systemic growth)
As the margin between the two widens, so to does the country’s / industry’s capacity to see:
  1. Creation of further posts for existing employees to progress into
  2. With progression of existing employees in moving to higher level jobs, it leaves the posts vacant for younger entrants (youths) to more easily enter the labour market
  3. More likelihood of higher wages increase across the board for all

This is dependent on the systemic development (what diversification could look like) of the economy, e.g. the story of the dairy milk production.

So, is this just a case of “not enough jobs”?  Yes? Given what?  We would need to complete the sentence … for everyone!

  1. What should we be doing today to solve the problem of  unemployment?  Who is the ‘we’?  The government?  The private sector?  The public sector?  The citizens?  The male or the man (the demand for labour?)?  The female or the woman (the supply of labour?)?
  2. What, in your view, would  citizens need to understand about these realities before they begin ‘discussions about unemployment’ in the country and to figure their own ways to turn the situation around?
  3. When should we be thinking about the solution to the problem?  When we create the problem or when the problem leads us to another problem?

What are the roles of the wife, mother and the man in turning these situations around?

Which role as a woman does she have an impact on the growing the demand for labour?

Which role does she have an impact on growing the supply of labour?  What is motivating her?

What roles are the men play in each of their relationships with these women?  As the son or the man?

Which role of the man helps grow the demand for labour (job creation) in the economy?

As the son or the man?

But this reasoning almost also begs the question, what were we doing when ‘the spark’ sparked the problem?

Sleeping, you say?

Ahh ….. SURE!

World map showing countries by nominal GDP per...

unemployment rate

English: unemployement rates in OECD countries...

Image via Wikipedia

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Image via Wikipedia

English: selfmade image of U.S. Unemployment r...

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Population, Landscape, and Climate Estimates, v3: Population Density 1990, Africa (Photo credit: SEDACMaps)

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Global: Settlement Points (Photo credit: SEDACMaps)

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