Paradoxes Too Often Essay

1040 words - 5 pages

Jobless output expansion, stagnant real incomes and persistently rising price levels, earlier theorized as incongruities, have existed alongside each other and plagued citizen wellbeing in developing and developed economies alike for at least a couple of decades now. From individual distress to social and political unrest, joblessness and the ills it brings have been the most dominant complications and tradeoff like scenarios in the realm of economic sciences. With sustained economic growth, the unemployment rate declines as an economy gears up to achieve the potential output level. However, for decades now, unemployment and labor supply deficits have continued to exist alongside each other. Corporations and economists alike grumble about the “skill and education mismatch” in the pool of available workers. Routine jobs are getting replaced with automation while jobs are being added in the sectors require cognitive and technological skills. Economics is evolving with refinement as emerging challenges fall on a different axis.
Nepal has been experiencing labor force deficit while worrying levels of unemployment have created anguish and desperation among youth and policymakers equally. Major economic sectors in Nepal are struggling to find domestic hands even as thousands continue to migrate. The Nepalese labor market and behavior is largely understood in terms of lack of jobs within the economy, shortage of workers even in the non-tradable areas, disguised unemployment in farm jobs and minimal labor force participation. A number of studies have highlighted that Nepal has been facing shortage of workers in many sectors of the real economy. As a labor exporting economy, unbridled labor force migration is, indeed, understood as major causal factor in labor supply deficit. However, unlike labor shortage created by migration, our contention is that most workers are not participating in labor force. This has exacerbated the problem of labor force deficit. We contend that in the 18 million strong labor force (CIA Factbook, Nov 2013) a substantial proportion not been exploring job opportunities inside the economy due to some expectations and information set which we are going to discuss through this essay. “Voluntary unemployment” as the phenomenon is termed as, means when available work opportunity does not entice participation in work force.
Decision to take up jobs depends on expected wages set by the workers themselves and the wage set by the market based on the productivity of workers. In an economy the expected wages are based on the opportunity cost of alternative employment which is the forgone monetary value of alternate employment opportunity for choosing current employment. As the market determined wage rate inches closer to expected wages, number of people willing to take up jobs goes up and vice-versa. Also, with an exception of very highly paid jobs and specific professions, most people on being offered higher wages tend to work more. This...


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