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The Growth Of Nigerian Economy And Unemployment (1980-2010)
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1.2 STATEMENT OF THE PROBLEM
The
problem of unemployment has occupied the mind of scholars, economists,
policy makers and international organizations for many years with an
increased tension in the last decade. Even though there are different
perspectives to unemployment, there is a general consensus that
reduction in unemployment will lead to good economic growth and
development that will lead to good change manifested in increased
capacity of people to have control over material assets, and obtain
physical necessities of life such as food, clothing and shelter.
According
to John Maynard Keynes the progressive adjustment of wage involves a
negative relationship between nominal wage changes and unemployment rate
known as Philip’s curve (1958). The simplest interpretation of this
curve is to consider that unemployment exerts downward pressure on
nominal wage when there are few unemployed; workers are in a position to
obtain higher unemployment because competition among employers to
attract workers is intensified by low unemployment.
Following the oil
doom in the economy in the 1980, the problem of unemployment started to
escalate with the introduction of monetary exchange rates and the
inability of most industries to import the raw materials required to
improve their output level.
In the depression phase demand for goods
and services is the minimum, construction of all types of capital goods
is at stand still; there is massive unemployment and the economic growth
and development of the country suffer. Also the generous unemployment
benefit may hinder individuals to look for a job in order to gain access
to unemployment benefits. Rapid population growth accompanied by
un-precedented inflow of rural migrants generate massive urban problem
of rural unemployment. The main aim of government is to attain full
employment level but it failed to materialize.
In Lewis model rural
to urban migration is one of the demographic characteristic of
developing countries and the mechanism theory which revealed that labour
transfers physically from agriculture to city based industrial
employment thus enhancing the expansion of the modern sector and
integration of the two sectors of the dual economy; inward migration to
urban area will continue as long as the expected value of earnings of
the urban wage exceeds the rural wages. Many people especially those
living in rural areas were frustrated by lack of job opportunities, also
they include those without work and who have job but want to work for
longer hour. A very little attention has been paid to self employment
scheme in Nigeria not until in the 1980’s during the period of great
recession; they adopted the structural adjustment programme (SAP).
To
provide a permanent solution to this problem arouse a universal
conviction that unemployment is inevitable and it created pessimism that
government has no power to bring unemployment trend to a halt; it is
not only a severe problem but also has a disquieting effect on the
economic, political and society as a whole.
According to Damachi
(2001) the task of solving unemployment problem is anchored on better
utilization of manpower through policies that promote economic growth.
The manpower board and national directorate of employment established by
the government have not reduced unemployment.
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