Is unemployment within the labour market primarily voluntary?

The worldwide recession precipitated by the financial crisis in the United States has had disastrous consequences for the UK economy as well.  This most recent episode of recession in the UK happens to be the worst it had faced in the period following the Second World War.  Based on the GDP numbers for the years 2008 and 2009, one learns that “the economy contracted even more sharply than previously thought in the first quarter of 2009: 2.4 per cent compared to the preliminary estimate of a 1.9 per cent contraction.” (Lynch, 2009)  The promising rise of industrial production in April 2010 did provide hope for an early recovery.  But this hope was to prove a mirage as the trend reversed in subsequent months.  Though the UK took a little while to catch up with the crisis in the United States, at the beginning of the second quarter of 2008, the region’s economy was in acute recession.  It has been close to four years since the onset of recession and subsequent economic slowdown in the UK and the prospects for a turnaround in the region remains distant. The question of unemployment in the labour market, and whether or not it is ‘voluntary’ needs to be studied under these prevailing economic conditions.  Also, a historical view of the role and operation of labour markets will lend clarity to the topic in question.  This essay endeavours to do the same by way of analysing and synthesizing related scholarly resources on this subject.

A look at the current unemployment problems in the UK reveals how acute a social, political and economic problem it has now become. For example,

“Concerns have been raised for a “lost generation” in the North East after the region was highlighted as a blackspot for youth unemployment. New research reveals that almost a third of people claiming unemployment benefit in the region are aged between 18 and 24, making the North East the worst region for youth joblessness in England.  The figures released by the GMB union, showed there were 18,765 claimants within the age bracket in the North East last month, 30.9% of the total.  That figure rose to 35% in County Durham, the fifth worst local authority area in the UK for young claimants.” (Lawson, 2011, p.6)

Many politicians and social activists believe that increasing unemployment will lead to a ‘lost generation’ of such young people.  This situation could lead to social fissures, with attendant increase in crime.  Already, statistics from the North East is troubling: “six out of the nine areas in the region had more than the national average for young claimants. County Durham, Sunderland, Northumberland, Hartlepool, South Tyneside and Darlington were all above the national average of 28%” (Lawson, 2011, p.6) Further, for many youth in the region, there are no clearly defined career paths ahead.  Such was not the case during the 1960’s and 1970s.  Whether or not this unemployment situation is voluntarily sought or involuntarily imposed can be learnt from several surveys undertaken recently.  What these surveys clearly indicate is the definite sense of ‘fear’ in the hearts and minds of the unemployed.  To the extent that fear is seldom a voluntarily embraced choice, unemployment in present day Britain is imposed on eligible and willing workers.  Participants of the survey were asked what they think will be the prospects for employment over the next year:

“The balance between positive and negative answers has averaged 25 since its inception in 1982-the higher the number, the more people expect unemployment to rise. The findings shows, fear of unemployment rose very strongly in mid-2008, just as the unemployment rate started to rise, but then fell back through early 2010 to a low of 30 in February. The balance was 35 in May, 40 in June and 54 in July. The last increase of 14 points is the second-largest in the series ever, behind an increase of 15 in January 1991, when unemployment was also 7.8 per cent and rising.” (Blanchflower, 2010, p.17)

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