Assignment of Economics Topic: Unemployment of Pakistan

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Submitted To: Madam.zarha Submitted by: Friend finder group Group members names: Arslan akram 11480 Junaid waqas 11478 M.usman Irfan Ahsan Zulqarnain 11461 11442 11436 11418

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Table of Content: Acknowledgement .. Executive summary . 03 Definition . 04 Explanation .. 04 Unemployment rate . .04 Pakistan unemployment rate . 05 Canada unemployment rate . .06 Survey 2011 . 07 Cases of unemployment in Pakistan .08 Effect of unemployment ...10 Pakistan inflation rate ...10 Pakistan GDP rate .11 Conclusion

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Definition of 'Unemployment'
Unemployment occurs when a person who is actively searching for employment is unable to find work. Unemployment is often used as a measure of the health of the economy. The most frequently cited measure of unemployment is the unemployment rate. This is the number of unemployed persons divided by the number of people in the labor force.

Explain of Unemployment
Unemployment describes the state of a worker who is able and willing to take work but cannot find it. A high unemployment rate generally indicates recession in economy with few job opportunities. Our country is facing the problem of unemployment. It has wasted our resources and peoples incomes are depressed. The socio economics system of Pakistan has failed to provide employment to the increasing labour force. Rate of unemployment is greater in rural areas as compared to urban areas. There are many reasons for unemployment. Voluntary unemployment arises when educated people choose not to work on the going wage rate. Involuntary unemployment arises due to inflexibility of wages in the face of economic shocks. Wrong government policies also cause the unemployment. The increase in population is another cause of unemployment. The resources of the country are limited but demand is higher than supply. Karachi is the biggest industrial base of Pakistan, but investors are hesitant to invest there due to no rule of law. Our educational system is also responsible for increasing unemployment rate among the educated youth. There are some solutions available though. The liberal economic and fiscal policies of the government can reduce unemployment rate. Government should seriously announce an economic recovery package to change industrial production and boost exports. New industrial zones throughout the country would also generate new opportunities for employment. Government should announce new packages for agriculture sector.

Unemployment rate
The unemployment rate represents the number unemployed as a percent of the labor force.

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Pakistan Unemployment Rate

The unemployment rate (10 years and over) in Pakistan was last reported at 5.95 percent in the 2010/11 fiscal year. From 1990 until 2009, Pakistan's Unemployment Rate averaged 5.88 percent reaching an historical high of 8.27 percent in December of 2002 and a record low of 3.13 percent in December of 1990. The labour force is defined as the number of people employed plus the number unemployed but seeking work. The nonlabour force includes those who are not looking for work, those who are institutionalized and those serving in the military. This page includes: Pakistan Unemployment Rate chart, historical data and news.

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Canada Unemployment Rate

The unemployment rate in Canada was last reported at 7.6 percent in January of 2012. From 1976 until 2010, Canada's Unemployment Rate averaged 8.53 percent reaching an historical high of 13.10 percent in December of 1982 and a record low of 5.90 percent in September of 2007. The labour force is defined as the number of people employed plus the number unemployed but seeking work. The nonlabour force includes those who are not looking for work, those who are institutionalised and those serving in the military. This page includes: Canada Unemployment Rate chart, historical data and news.

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Unemployment rate at 6% labour force survey 2011

The official rate of unemployment in Pakistan is 6%, according to government statistics released on Monday that also show job opportunities for women and people in rural areas are rising while those for men and people living in urban areas are dropping. The Federal Bureau of Statistics released the Pakistan Labour Force Survey 2011 on Monday, which shows the unemployment rate rising to 6% in July 2011, compared to 5.6% a year ago. The size of the total workforce was 57.3 million. The total number of unemployed rose by 280,000 people during the past year to 3.4 million. While the governments credibility among independent economists has increased in recent years about some statistics, unemployment figures are routinely mocked as being grossly inaccurate. In private conversation, even Finance Minister Abdul Hafeez Shaikh and Planning Commission Deputy Chairman Nadeemul Haq admit the numbers do not reflect reality, though they have declined to say so publicly and appear to have taken no actions to produce more realistic figures. Nevertheless, the numbers do reveal some interesting patterns, even if the precise figures are unreliable. Unemployment for women, for example, declined from 9.5% last year to 8.9% this year. The corresponding figures for men rose from 4.4% to 5.1%. In absolute terms, the number of unemployed women decreased to 1.18 million from 1.21 million. The number of jobless men increased to 2.22 million from 1.91 million. The rise of employment opportunities is a welcome sign in a country that has historically had a cultural bias against female participation in the workforce. Unemployment in rural areas declined from 4.8% to 4.7%, a reflection of strong growth in agricultural commodity prices and consistent government support for several crops such as wheat.
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Urban areas, meanwhile, saw unemployment rise to 8.8%, from 7.2% last year, as the energy crisis continues to cripple most businesses in cities and towns with rising costs, forcing them to lay off people or slow their hiring plans. Yet surprisingly, the share of the labour force employed by the manufacturing sector rose to 13.7% of the workforce, up from 13.2% last year, suggesting that Pakistani industries have found ways to mitigate the effects of the power shortage and have started hiring again. Even more surprising is the fact that the only province that saw a fall in unemployment is Khyber-Pakhtunkhwa, which has been badly affected by violence and terrorism. The agriculture sector continues to be the largest employer, with 45.1% of the workforce working on farms and with livestock, three-quarters of whom are women. About 34% of the labour force is described as people who either own their own business or work as independent contractors or day labourers with no fixed employer. Another 36% of workers have a permanent employer. Approximately 27.7% of people are described as aligned with family businesses, a figure that many labour economists suspect is where the government hides the true number of people unemployed, since it includes people who are not actively working and not receiving any compensation.

Causes of unemployment in Pakistan:Unemployment has become a global issue because of the economic recession that has hit almost every country of world at the present time. However, in Pakistan, this problem has reached to the maximum level and with every passing day, it is even growing bigger. There are some issues which cannot be denied and which are out of control as the global recession that also causes unemployment. But, in Pakistan, the major reason of this problem is lack of proper system which is required to run a country in an appropriate way. In Pakistan, thousands graduates complete their education every year and start searching jobs. But, instead of generating more job opportunities, the government has put the country in critical situation. The shortage of electricity and gas has harmed the industry in Pakistan and countless people have lost their jobs because their companies could not survive. Instead of increasing the opportunities, the bad policies of government are causing people to lose their jobs. Another important factor which adds fuel to the fire is that there is no merit at all. The vacancies are announced but are filled with those who are highly incompetent. Corruption is touching the sky as people bribe the officials in order to get jobs and when they get, they also start doing corruption. Those who are really capable of the jobs always wander here and there to find a good job but they fail to get it because they do not have much money or contacts to bribe the officials. Unemployment in Pakistan haunts the bulk of general masses because they do not find opportunities and when they do, they fail to get consideration.
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Corruption is one of the major reasons of unemployment in Pakistan as only those people get decent jobs in public sector departments who have a strong family background or have enough money in their pocket to bribe the relevant officials. The government of Pakistan should work for the development of the country and should leave their personal benefits behind. They should take rapid steps to create more and more job opportunities by facilitating the industry and all other sectors in the country. Government should also ensure the selection of people on merit when it comes to get a job in a public sector department. Pakistan will make rapid progress when people will have jobs and will feel that their future is secure.

Major Causes of Unemployment:1. Employment in the private sector absolutely stopped because they shifted their capital to other countries because of nationalization of industrial units badly affected the investment industrial sector. 2. The higher growth rate of population is the major cause of unemployment in Pakistan. The resources of the country are limited because population has exceeded the optimum level. 3. Karachi is the biggest industrial base of Pakistan, but investors are reluctant to invest there because of unrest and violence. 4. Our educational system is also responsible for increasing unemployment rate among the educated youth. The attitude of our youth towards the choice of a career is unrealistic and unproductive. Rapid mechanization and computer technology also causing unemployment. 5. Lack of infrastructure and facilities in the field of energy, telecommunication and transportation also prevent the industrialist from setting up new industries. 6. Lack of enough industries to employ ever increasing number of graduate in Pakistan 7. The government is not involving in capital expenditures which create more jobs. 8. Main issue of unemployment in our country is that whenever a new technology comes as software or hardware then all the people starts studying about that. Then at the end, you will see ten thousand students of a particular field about 5 to 10 job vacancies. 9. Things are not handled in appropriate manner, as the vacancies are less but job seekers are more than that. 10. Opportunities are not enough and system of reference is so much indulged in our society that if a company needs employees then workers of that company will provide some
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resume to them of their relatives and friends so in this way many people dont get the opportunity to apply for those jobs.

Effect of unemployment in Pakistan:Definition Inflation Rate:True inflation begins when the elasticity of supply of output in response to increase in money supply has fallen to zero or when output is unresponsive to changes in money supply. When there exists a state of full employment, the conditions will be clearly inflationary, if there is increase in supply of money. But we dont subscribe to the classical view that when there is full employment we can say that when money supply increases it results partly in the increase of output (GNP) and it partly feeds the rise in prices and when the supply of output lags far behind, the rise in prices is described as inflationary.

The following definitions are taken from the web to simplify the meaning and concept of inflation.
1 An increase in the general price level of goods and services; alternatively, a decrease in purchasing power of the dollar. 2 The number of dollars in circulation exceeds the amount of goods and services available for purchase; inflation results in a decrease in the dollar's value. 3 The average rate of increase in prices. When economists speak of inflation as an economic problem, they generally mean a persistent increase in the general price level over a period of time, resulting in a decline in a currency's purchasing power. Inflation is usually measured as a percentage increase in the consumer price index. 4 The increase in the cost of living (prices for goods and services). Inflation is measured as an annual average by the CPI (Consumer Price Index.)

PAKISTAN INFLATION RATE:The inflation rate in Pakistan was last reported at 10.1 percent in January of 2012. From 2003 until 2010, the average inflation rate in Pakistan was 10.15 percent reaching an historical high of 25.33 percent in August of 2008 and a record low of 1.41 percent in July of 2003. Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. The most well known measures of Inflation are the CPI which measures consumer prices, and the GDP

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deflator,

which

measures

inflation

in

the

whole

of

the

domestic

economy.

PAKISTAN GDP GROWTH RATE The Gross Domestic Product (GDP) in Pakistan expanded 2.39 percent in the second quarter of 2011 over the previous quarter. Historically, from 1952 until 2011, Pakistan's average quarterly GDP Growth was 5.00 percent reaching an historical high of 10.22 percent in June of 1954 and a record low of -1.80 percent in June of 1952. Pakistan's economy has suffered in the past from decades of internal political disputes, a fast growing population, mixed levels of foreign investment, and a costly, ongoing confrontation with neighboring India. However, IMF-approved government policies, bolstered by foreign investment and renewed access to global markets, have generated solid macroeconomic recovery during the last decade.

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Effect of unemployment in Pakistan on its real estate sector:Among many factors that are complicating the estate market, unemployment is one of them. Unemployment means people have no income, and no income means zero purchasing power. So, in unemployment individuals simply cannot afford to buy properties or pay their home mortgage on time. Just imagine! Would you be able to pay your mortgage payments if you are jobless for more than six months? Probably not! Many home owners, due to unemployment, cant make timely payments and this puts many emp ty homes in the market. So when unemployment increases, demand of properties declines which leaves a lot of empty spaces across the country. This puts the entire real estate sector in distressed condition due to decrease in housing prices. Though unemployment can be seen in Pakistan yet the prices of the Pakistan properties are not low. The reason behind is the increased inflation and the rate of unemployment which varies across various cities. Though unemployment is the major problem of Pakistan but the fact is that unemployment is only high in certain cities where some cities offer more employment opportunities than the others. For instance, if you look at the major cities of Pakistan like Lahore, Islamabad and Karachi, you will come to know that employment opportunities are more as compared to the less developed cities like Chakwal, Rahim Yar Khan, Sargodha, Sialkot and many others. That is why; people from the rural and less developed areas are relocating to the cities to make a better livelihood. The influx of the people towards these major cities is one of the reasons for the increased demand of properties situated in these areas and as a result the prices of Lahore real estate, Pakistan real estate and Islamabad real estate are sky-rocketing, whereas, the prices of the properties in less developed cities are low due to their low demand. Moreover, experts believe that an area, where unemployment rate is high, crime rate is also high. The deprived sectors of the society resort to ill means in order to make their ends meet. It is a natural thing that the area with a high crime rate does not appeal to the real estate buyers. That brings the phenomenon of Karachi is question where despite the high crime rate, the real estate value is also souring. The reason behind that is the fact that it is the biggest city of Pakistan with important ports and it can never lag behind with respect to business and employment opportunities. But still if we compare the demand of Karachi real estate property with Lahore and Islamabad, we will come to know the difference in prices. Properties in Lahore and Islamabad are higher as compared to the properties of Karachi and one of the reasons of that is the high crime rate in Karachi. Government of Pakistan is taking effective steps to wipe unemployment from the country. In this regard, many new business projects are initiated in less developed cities from time to time to generate employment opportunities. Also, the sincere efforts of SBP cannot be denied as many scheduled banks are now opening new branches throughout Pakistan to generate employment opportunities equally in all the cities of Pakistan. Not only the employment generated in this way will boost real estate sector but all the sectors of economy will also get a much needed boost.

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Acknowledgement:
First of all I am very thankful to ALLAH Almighty who gave us plenty of strength to complete our project. After that we are very thankful to our respected teacher Madam well to perform our task well.

Zarha who guides us so

I also special thanks and regards to my family for their continuous support and Prayers for me during the course of study.

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EXEXTIVE SUMMRY
In this assingment we discus about the big problem in all over the world of unemployment in which we show the unemployment rate of pakistan and canda and we survy the GDP rate of 2011 and define the unemployment . *. Causes of unemployment in Pakistan. Unemployment has become a global issue because of the economic recession that has hit almost every country of world at the present time. However, in Pakistan, this problem has reached to the maximum level and with every passing day, it is even growing bigger. 1. Employment in the private sector absolutely stopped because they shifted their capital to other countries because of nationalization of industrial units badly affected the investment industrial sector. 2. The higher growth rate of population is the major cause of unemployment in Pakistan. The resources of the country are limited because population has exceeded the optimum level. Karachi is the biggest industrial base of Pakistan, but investors are reluctant to invest there because of unrest and violence.and we discuse about the inflation The inflation rate in Pakistan was last reported at 10.1 percent in January of 2012. From 2003 until 2010, the average inflation rate in Pakistan was 10.15 percent reaching an historical high of 25.33 percent in August of 2008 and a record low of 1.41 percent in July of 2003. Inflation rate refers to a general rise in prices measured against a standard level of purchasing power.

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Conclusion
Our country is facing the problem of unemployment. It has wasted our resources and peoples incomes are depressed. The sociol economics system of Pakistan has failed to provide employment to the increasing labour force. Rate of unemployment is greater in rural areas as compared to urban areas.

The shortage of electricity and gas has harmed the industry in Pakistan and countless people have lost their jobs because their companies could not survive. Instead of increasing the opportunities, the bad policies of government are causing people to lose their jobs.
Government of Pakistan is taking effective steps to wipe unemployment from the country. In this regard, many new business projects are initiated in less developed cities from time to time to generate employment opportunities.

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