C.RFrank Jr (1968) wrote one of the characteristics of the less-developedeconomies of the world is a rapidly growing urban population and urban workforce combined with a much slower increase in employment opportunities in thelarger scale urban establishments. The result has been either unemployment orunder-employment in small-scale, often individual or family-run,establishments. Those countries which are industrializing rapidly seem tosuffer from this phenomenon just as much, if not more, than those which are notindustrializing quickly.
Shamenda(2012) wrote Poverty levels have remained significantly high despite theeconomic growth the country has recorded in the past years. Some of the causesof the high unemployment levels include: Low manufacturing and industrial base,weak forward and backward linkages within the economy i.e. Between SMEs andMulti-National Corporations, low levels of economic diversification andproductivity, weak education system that doesn’t support practical work relatedskills, lack of investments in areas ofhigh potential for employment generation E.g. Agriculture and Focus on primary/raw products exports dueto lack of investments in value addition. He stated that the greater the unemployment rate; the less opportunitiesto achieve high economic growth as well as the emergence of the negative socialaspects.
Riley(2011) stated that unemployment persistently high unemployment involves a lossof potential national output (i.e. GDP operating well below potential) and is awaste of scarce resources. Unemployment creates huge costs for individuals andfor the economy as a whole. Peoplewho choose to leave the labour market permanently because they have lost themotivation to search for work, this can have a negative effect on long runaggregate supply and thereby damage the economy’s growth potential. Someeconomists call this the “hysteresis effect”. When unemployment is high therewill be an increase in spare capacity – in other words the output gap willbecome negative and this can have deflationary forces on prices, profits andoutput.
Thereare a number of policies and strategies that have been made, aiming to addressthe challenge of unemployment. For example;• Industrialization and Job CreationStrategy 2012–16• In industrialization and Job CreationStrategy, the Government of Zambia (GOZ) sets a goal of creating 1 millionformal jobs between 2012 and 2016. This is to be achieved through both foreignand local investment, and will require economic growth above 8 per cent perannum during the period. The strategy focuses on four growth sectors with thegreatest potential to achieve the objectives of promoting growth andemployment, increasing value added and expanding National Employment and LabourMarket Policy (NELMP) 2007–11 Themain objective of the NELMP, adopted in 2006 and currently under revision, isto create quality jobs under conditions that ensure adequate income andprotection of capital.
The specific targets identified were to bring theunemployment rate below 10 per cent by 2011 and ensure that by that date 90 percent of the workforce was operating in an environment where their rights arerespected (GOZ, 2005, p. 17). As well as identifying sectors with the potentialto create employment, namely agriculture, mining, manufacturing, tourism,trade, transport, and information and communications technology (ICT), thepolicy highlights the promotion of small and medium-sized enterprises (SMEs),efforts to make the financial sector more inclusive, and the provision of relevantskills by the education and training system. It addresses several cross-cuttingissues, such as the HIV/AIDS pandemic, environmental degradation, gender andgovernance. To ensure the continued relevance of the NELMP, the Government ofZambia has asked the ILO to support the review of the policy and to suggeststrategies for more and better jobs for inclusive growth that would be in linewith the Industrialization and Job Creation Strategy. (Harasty, Kwong, Ronnås ,2015) TheWorld Bank’s Country Partnership Strategy (CPS) for Zambia for fiscal isclosely aligned with the Zambian government’s Vision 2030 and Zambia’s NationalDevelopment Plans. The plans are organized around the theme of broad basedwealth and job creation through citizenry participation and technologicaladvancement.
Specific development goals are to foster a competitive andoutward-oriented economy in order to significantly reduce hunger and povertyand reach middle income status.