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The definition of structural unemployment is the unemployment that results from structural changes in the economy which results in a long run mismatch of jobs being offered and skills of the labor force. The definition of poverty is the conditions of people who have very low incomes. As a single measure to help reduce structural unemployment and alleviate poverty we would recommend empowering the low income sector of the population with ‘free’ basic education and training. Free basic education and training is a supply side based measure to empower the less privileged with skills that meet requirements of jobs being offered by firms.
This measure calls for the government to drastically reduce the barriers to accessing education and training for the under privileged, by either giving grants or loans to willing students for their primary, secondary and tertiary education. A large portion of structural unemployment6 arises due to lack of appropriate skills (i. e. lack of the right education and training). This lack of skills happens at all levels of the job market, from shop floor level all the way to management level.
At the low level this is caused by people who are seeking employment, but did not even have the opportunity to go to school to learn to read and write, which is a basic requirement for employment, even to become a sweeper. At the high level of skills lack you have secondary or University/tertiary level graduates who fail to acquire advanced skills for high level jobs due to lack of financial resources to enter into the high level training programmes such as Graduate Business Schools. These people will again face unemployment as firms will not employ them citing lack of the appropriate skills.
Free Education and Training Programme This programme of free education would be open to all ages and gender but targeted at people who can demonstrate that they can not afford to pay for their education or training. Included in beneficiaries would be workers who have been retrenched from declining industries and are seeking to retrain and acquire new skills. This measure would be implemented by the government paying fees directly to the learning institutions for each student on the government free education programme. Money for this government backed rogramme would be raised from increased taxes from the corporate sector of the economy, since government would be developing workers for the firms ultimate benefit. Another source of fund especially for us in the developing countries would be through non-governmental organizations such as ?? / . These NGO would concentrate mainly on the primary education sector so that the economy will have a high basic level of literacy ensuring that almost everyone is employable. The other upside to educating and training is that it also gives rise to self-employment to those with an entrepreneurial spirit.
This further boosts labor demand as the new enterprises will ultimately generate jobs in the informal market further reducing unemployment and alleviating poverty. This measure will also explicitly reduce poverty as there is a direct positive relationship between unemployment and poverty as seen by the high poverty levels and high unemployment levels in developing countries and on the other hand low poverty levels and low unemployment levels in developed countries. Hence by reducing unemployment we will also alleviate the poverty levels.
This measure in addition to making the majority of the under privileged employable also raises the individual’s status as they can compete for high level jobs as long as they have undertaken the relevant training or education. Hence does not relegate the under privileged to low level jobs, but if the individual has the aptitude, they can train for the high level jobs. Education and training has the effect of leveling the playing field. i. e because you father is a mine worker does not mean you can only become a mine worker.
By this measure if you have the aptitude you can train to become a doctor ( you are not limited by your backgrounds) , allowing you to move your family from poverty. An example where this measure was put to good use and generated successful results was in Zimbabwe. At independence in 1980 unemployment among the black uneducated majority stood at ?? %. The government embarked on free primary education , subsidized secondary education and provided loans to those that qualified to local and international universities. By 1990 nemployment had reduced to ?? %. Conclusion By implementing this measure of giving the under privileged the same educational opportunities as high income population the government would level the playing field allowing the underprivileged to have the same job opportunities as the high earners of the population there by reducing structural unemployment, by having more qualified workforce that meets the needs of industry and alleviating poverty by pulling up the under privileged by opening up their opportunities for earning a decent living.