1.0 Introduction According to Davidson, (1998) unemployment occurs when a person who is actively searching for employment is unable to find work. Unemployment is often used as a measure of the health of the economy. The most frequently cited measure of unemployment is the unemployment rate. This is the number of unemployed persons divided by the number of people in the labor force.
The unemployment rate in Kenya was last reported at 40 percent in 2011. Historically, from 1999 until 2011, Kenya Unemployment Rate averaged 22.43% reaching an all time high of 40% in December of 2011 and a record low of 12.7% in December of 2006. The unemployment rate can be defined as the number of people actively looking for a job as a percentage of the labor force (Biko, 2012).
This paper explores the causes of unemployment in Kenya and the theories of unemployment in Kenya.
2.0 Causes of Unemployment in Kenya Majority of the unemployed in Kenya are the youth. There account for the biggest percentage of the job seekers in Kenya. This is a major drawback to the economy because the youth are the most productive members of the society. All this labor left out means less production and even more liabilities to the economy. Youth unemployment statistics in Kenya show that 60% of the Kenyan population is under the age of 30. The Kenyan unemployment rate is approximately 40% as of December 2011 and that an estimated 64% of unemployed Kenyans are youth (Biko, 2012).
This section explores some of the causes of unemployment in Kenya.
2.1 High Population Growth Kenya’s population is growing at a very fast rate compared to the economy. There are more people than the current economy can sustain therefore the large number of unemployed persons in Kenya. Such a high population growth rate is incompatible with the available arable land in the rural areas. Hence people tend to migrate in the urban areas in search of jobs. This aggravates unemployment in the urban areas. This increased population coupled with unemployment really lowers the per capita income of the Kenyan economy.
2.2 Global Economic Recession Recent global economic recessions have reduced the capacity of most economies to reduce unemployment. Kenya is not an exception to this. This increased recession has led to many companies laying off most of their employees to cut down on operational costs. The problem can be solved through greater international co-operation. This is illustrated by the study done by Agrawal, (2009). The study found that Kenyan workers face massive lay-offs, no salary increments and a freeze on new jobs as companies struggle to survive in a bad economy. It also established that 7300 workers have already been sacked and a further 6000 are expected to loose their jobs by December, 2009. It has also discovered that many companies will pay out smaller dividends to shareholders and are rescheduling their debts to stay afloat. Over 50% of the companies which participated in the survey have agreed that their sales and turnover has gone down below expectations. High cost of fuel and transport and poor road network are considered as the major factors responsible for the economic slow down.
2.3 Inappropriate Education System The Kenyan education system has been very good in imparting knowledge to students for a long time. But the problem has come up whereby it has been seen to teach students how to pass exams and not how to become productive later on in their lives. This has had damaging effects on the students after completion of school. These students have few skills that they can apply in the job market and if they have they are not appropriate for the kind of jobs they are looking for. The education system in Kenya was preparing people for jobs that were not there. The 8-4-4 system of education is designed to try to overcome this anomaly. It is intended to make people self reliant. But it has a long way to go before it can really have an impact on the kind of labor it provides to the Kenyan market which of late has been an economy of job seekers.
2.4 Seasonal Jobs
In Kenya most of the jobs available are usually seasonal, there are there for a specific period of time. Demand for labor in rural areas is mostly seasonal. This is made worse by the general ignorance of the existence of jobs elsewhere as well as by occupational immobility. This creates problems of underemployment and disguised unemployment. Also some of the contractual jobs that come up especially for the manual laborers getting a job after that can take a while due to lack of any professional skills to back them up.
Most firms tend to produce below their capacity, thereby not employing as many people as their capable of. This arises due to lack of sufficient demand of their products. It can also be as a result of monopoly practices that limit output. These companies don’t lack the ability to hirer manpower but continue underutilization to save on the cost of production therefore increasing the level of unemployment in Kenya.
2.6 Imperfections in the Labors Market
There are imperfections in the labor market caused by government and trade union interventions. This has tended to distort the labor market by maintaining minimum wages above the market equilibrium. As such, the wage structure in Kenya has failed to coordinate demand and supply
3.0 How the Problem of Unemployment in Kenya can be solved Unemployment has a major negative effect not just on the individuals themselves but also on the collective economy. These unemployed persons especially the youth can result to other methods of seeking money; these include criminal activities which for many years have provided an avenue for easy money. Also the increased number of dependents who are not contributing anything to the economy further lowers the per capita income.
3.1 Change Education System The Kenyan education system should teach individuals how to be self reliant and work harder towards self employment. This can only happen if the level of specialization starts early in the students life. This students will be able to nurture there skills from a tender age. This makes them even better than they would have been specializing in the last years of their studies.
In our current education system, we teach our children that success is defined by the kind of employment they will land on after campus. So they will have to depend on someone to create that employment for them. Why not teach them to create employment for others.
The foundation we lay for our children toady, will determine the future of this nation. Let us teach them to be individuals, be different, inspire creativity, and engage them to work with their hands. Which by the way they love to do at tender age, till we misinform them that dirty disease infested and kill their creativity right there at that tender age.
3.2Build more manufacturing companies
The Kenyan government can ease the rules on setting up of companies. This will make it easier to start a company in Kenya. This will also attract investors due to the lowered tax and flexibility of the licensing boards in Kenya.
4.0 Theories of unemployment 5.0 Criticism of employment policies in Kenya 6.0 Conclusion References Biko, S. (2012). Increasing unemployment rate continues to push Kenya to the precipice of chaos in an election year. Retrieved on June 4, 2013 from http://www.sokodirectory.com/index.php Agrawal, S. (2009). Global Recession Takes toll on Kenyan Economy. London: Commonwealth Secretariat Marlborough House, Pall Mall,
Davidson, P. (1998). “Post Keynesian Employment Analysis and the Macroeconomics of OECD Unemployment,” The Economic Journal