ECONOMICS MADE SIMPLE : The ugly face of unemployment, underemployment

Unemployment and underemployment are increasingly becoming economic, social and political challenges in many countries including Tanzania. In 2014, a combined total of 16,740 people were struggling to fill just 117 vacancies.

This situation is a typical example of a nation of job seekers as opposed to job creators.
In the third week of December 2018 there have been news of 594,300 applicants vying for 6,099 public sector vacancies in the past three years. In what follows, selected economic perspectives of a jobs seeking nation as opposed to a jobs creating nation are outlined.
Mass Jobs Applications
When 594,300 people seek to fill 6,099 vacancies it implies that supply is 974.4 times more than demand.
In 2014 about 10,000 job seekers were seeking to fill just 70 vacancies. Supply was 142.9 times more than the demand. Also, about 6,740 labour market entrants were eyeing on just 47 vacancies in the same year. Supply was 143.4 times more than demand.
The figures tell a lot in various contexts. Economists in general and labour economics scholars and practitioners in particular will see it as a situation where the labour market supply side has much more to offer than the absorption capacity of the demand side of the market.
 Problematizing the Numbers
Among the economic interpretation of the figures above include the fact that the labour market is overburdened by its entrants. In order to obey the laws of free interpaly of market forces of supply and demand in this situation, profit-seeking entities are likely to offer low wages and salaries.
If uncotrolled, they may even abuse their market power and offer substandard working environment in the broader context of decent jobs.
All these are grounded on the economics of market structure in general and labour market monopoly by employers in particular.
Labour Supply
The challenge of a very big number of would-be employees seeking to fill very few positions should be understood from the labour market supply side. There is arguably anything between 800,000 and 1,000,000 new labour market entrants in Tanzania annually.
These are those that ‘graduate’ and exit from various learning and education institutions at various levels.
Since the major and far-reaching reforms in the management of Tanzania’s economy in the mid 1980s, one has seen increased supply of education institutions at all levels.
These are the ‘factories’ that produce the collosal amount of new labour market entrants annually.
The increase in the labour market entrants has arguably been over and above the demand for the same.
Labour Demand
Labour demand is a derived demand. Captains and titans of the industry do demand for labour if there is demand for goods and services to be produced by the labour.
Without demand or with low or declinng demand for both consumer and producer goods, corporate chiefs have no economic and business case and incentives to demand for more labour.
For a Tanzanian-type economy to increase its demand for labour, a number of things have to happen. The economy has to grow faster and more sustainably, consumption of domestically produced goods and services has to increase and the environment for all these to happen has to be in place.
Towards Jobs Creation
The challenging situation where labour supply is many times the demand for the same needs to be fixed sooner than later.
Apart from fixing what is broken in the labour demand side of the labour market equation, jobs creation is the current thinking and unconventional thinking globally and at home.
This needs to happen in the context of entrepreneurship and self-employment. For this to happen, there is a need to have what it takes for entrepreneurship and self-employment to be a reality.
Among other things, proper entrepreneurial training, mentoring, coaching and access to capital have to be in place.
Self Employment
Self employment is the key for jobs-creating nation. With proper preparations it should be possible for graduates at various levels of education to be self employed. Necessary preparations include building good attitude towards self employment.
Entrepreneurial skills such as courage, taking initiatives, perseverance, ability to see opportunities and risk taking ability and willingnes are very essential.
Apart from these pre-requisites, soft skills are very important for self employment. They include skills such as hard work, team spirit, communication skills including oral, written and body language communications.