Unemployment problem in Bangladesh Tourism economics

© ™ Fazlea Allahie | Student | IBAIS University | email: fazleaallahie@gmail.com
PAGE 1Tourism Economics: Unemployment Problem
CHAPTER - 01
INTRODUCTION
1.1 Unemployment
Unemployment is defined as a situation where someone of working age is not able to get a
job but would like to be in full-time employment.
Unemployment is defined by the Bureau of Labor
Statistics as people who do not have a job, have actively
looked for work in the past four weeks, and are currently
available for work. Also, people who were temporarily
laid off and were waiting to be called back to that job are
included in the unemployment statistics. Those who
have not looked for work within the past four weeks are
no longer counted among the unemployed.
1.2 Unemployment Problem
Unemployment is an issue which does not exist in just one location. On the contrary it is a
global phenomenon which affects a number of places across the globe. Even the most
developed countries in the world have to deal with this issue. Unemployment is a problem
which affects not just individual people but the financial and economic condition of a whole
country. It is for this reason that countries try their best to have proper economic policies so
that at no point in time do they find themselves in a problematic situation.
The unemployment of resources, especially labor, is one of the more important
macroeconomic issues facing economists and government leaders. The other macroeconomic
issue with the same status is inflation.

The devastating economic conditions of the 1930s, which at its depth saw one out of four
workers unemployed, brought to the forefront the problems of unemployment and induced
economists to develop theories to explain the unemployment and to suggest corrective
policies. The reason that economists and policy makers have been and continue to be so
concerned with unemployment stem from two key problems: personal hardships and lost
production.
Main Causes of Unemployment Problem
The following are the main causes of unemployment:
(i) Slow Economic Growth:
The economy is underdeveloped and role of economic growth is very slow. This slow growth
fails to provide enough unemployment opportunities to the increasing population.
(ii) Increase in Population:
Constant increase in population has been a big problem. It is one of the main causes of
unemployment. The rate of unemployment is 12.38% in 10th Plan.
(iii) Agriculture is a Seasonal Occupation:
Agriculture is underdeveloped. It provides seasonal employment. Large part of population is
dependent on agriculture. But agriculture being seasonal provides work for a few months. So
this gives rise to unemployment.
(iv) Joint Family System:
In big families having big business, many such persons will be available who do not do any
work and depend on the joint income of the family.

Many of them seem to be working but they do not add anything to production. So they
encourage disguised unemployment.
(v) Fall of Cottage and Small industries:
The industrial development had adverse effect on cottage and small industries. The
production of cottage industries began to fall and many artisans became unemployed.
(vi) Slow Growth of Industrialization:
The rate of industrial growth is slow. Though emphasis is laid on industrialization yet the
avenues of employment created by industrialization are very few.
(vii) Less Savings and Investment:
There is inadequate capital in the World. Above all, this capital has been judiciously invested.
Investment depends on savings. Savings are inadequate. Due to shortage of savings and
investment, opportunities of employment have not been created.
(viii) Causes of Under Employment:
Inadequate availability of means of production is the main cause of under employment.
People do not get employment for the whole year due to shortage of electricity, coal and raw
materials.
(ix) Defective Planning:
Defective planning is the one of the cause of unemployment. There is wide gap between
supply and demand for labour. No Plan had formulated any long term scheme for removal of
unemployment.
(x) Expansion of Universities:
The number of universities has increased manifold. There are 385 universities. As a result of
this educated unemployment or white collar unemployment has increased.

(xi) Inadequate Irrigation Facilities:
Even after the completion of 9th five plans, 39% of total cultivable area could get irrigation
facilities. Due to lack of irrigation; large area of land can grow only one crop in a year.
Farmers remain unemployed for most time of the year.
(xii) Immobility of labour:
Mobility of labour in rural area is low. Due to attachment to the family, people do not go to
far off areas for jobs. Factors like language, religion, and climate are also responsible for low
mobility. Immobility of labour adds to unemployment.
All these factors add to unemployment.
1.3 Different Types of Unemployment
There are three major types of unemployment including cyclical, frictional, and structural.
3 Main Types Plus 6 More - Which Is the Worst. Let's take a look at each one of them
through the eyes.
1. Natural Unemployment : There will always be some level of unemployment, even in a
healthy economy. The lowest level of unemployment was 2.5 percent, right after the
Korean War. This was an economic bubble that soon led to a recession. That's why the
natural unemployment rate of 4.5 - 5.0 percent is a more healthy indicator. The natural
rate of unemployment is a combination of frictional, structural and surplus
unemployment. Even a healthy economy will have this level of unemployment because
workers are always coming and going, looking for better jobs. This jobless status, until
they find that new job, is the natural rate of unemployment. Both fiscal and monetary
policymakers use that rate as the goal for a full employment.

2. Frictional Unemployment: Frictional unemployment is when workers leave their old
jobs but haven't yet found new ones. Most of the time workers leave voluntarily, either
because they need to move, or they've saved up enough money to allow them to look for a
better job.
Frictional unemployment also occurs when students are looking for that first job, or when
mothers are returning to the workforce. It also happens when workers are fired or, in some
cases, laid off due to business-specific reasons, such as a plant closure.
Frictional unemployment is short-term and a natural part of the job search process. In fact,
frictional unemployment is good for the economy, as it allows workers to move to jobs where
workers can be more productive.
Causes: Why does frictional employment exist & it would be more logical for workers to
hold on to their existing jobs until they find new ones. But often workers must move for
unrelated reasons before can look for new jobs. Workers might get married or must care for
elderly relatives. Other times, worker might have saved enough money so they can quit
unfulfilling jobs & have the luxury to search until find just the right opportunities.
During a recession, frictional unemployment drops. Workers are afraid to quit their jobs even
if they don't like them. They know it will be difficult to find better ones. But unemployment
rates still rise. That's because cyclical unemployment more than offsets the decline in
frictional unemployment. Businesses lay off employees whether they like their jobs or not.

Effects
Frictional unemployment isn't harmful to an economy. An increase in frictional
unemployment means more workers are moving toward better positions. In fact, frictional
unemployment benefits the economy. It allows companies more opportunities to find
qualified workers.
If everyone stayed in their jobs until they found new ones, it would be harder for companies
to bring on good workers. Labor costs would rise, creating cost-push inflation. Workers' pay
would increase, reducing income inequality.
Examples
A good illustration of frictional unemployment is when students graduate. They join the labor
force and are unemployed until find work. A second example is mothers who rejoin the
workforce after they've risen own children. A third example is a construction worker moving
to Arizona in the winter & are all counted in the frictional unemployment figures once start
searching for work. In all of these examples are improving the financial situations.
Frictional Unemployment Rate Calculation
T he Bureau of Labor Statistics measures frictional unemployment. It counts those who have
actively looked for jobs in the last four weeks.
Job leavers (those that voluntarily quit their jobs.
Reentrants.
New entrants.

Frictional Unemployment Cannot Be Reduced Through Expansionary Monetary Policy.
In fact, that might even increase it. That's because, in a booming economy, jobs are in a
higher supply. Often employers have a hard time finding qualified candidates. In the
expansion phase of the business cycle, workers feel more confident to quit their job in search
of a better one. That increases frictional unemployment.
3. Structural Unemployment - Structural unemployment is when shifts occur in the
economy that creates a mismatch between the skills workers have and the skills needed
by employers. An example is when an industry fires machinery workers and replaces
them with robots. The workers need to learn how to manage the robots that replaced
them. Those that don't need retraining for other jobs or will face long-term structural
unemployment.
A long recession often creates structural unemployment. If workers stay unemployed for too
long, their skills have likely become outdated. Unless workers are willing and able to take a
lower-level, unskilled job, may stay unemployed even when the economy recovers. If this
happens, structural unemployment leads to a higher rate of natural unemployment.
Examples
Technological advances have created structural unemployment in the newspaper industry.
Web-based advertising has drawn advertisers away from newspaper ads. Online news media
has drawn customers away from physical newspapers. Newspaper employees, such as
journalists, printers and delivery route workers, were laid off. Their skills were focused on
the paper's method of distributing news & had to get new training before qualifying for a job
in the same field. Farmers in emerging market economies are another example of structural
unemployment.

4. Cyclical Unemployment –
Cyclical unemployment is not part of the natural unemployment rate. It's caused by
the contraction phase of the business cycle. That's when demand for goods and services fall
dramatically, forcing businesses to lay off large numbers of workers to cut costs.
Cyclical unemployment tends to create more unemployment. This is because the laid-off
workers have less money to buy the things they need, further lowering demand.
Government intervention, in the form of expansive monetary policy and even fiscal policy, is
usually required to stop the downward spiral. After the stock market crash of 1929, the
government did not step in right away. This led to the Great Depression, which lasted 10
years and led to a 25 percent unemployment rate.
5. Long-Term Unemployment: Long-
term unemployment occurs for those actively
looking for a job for over 27 weeks. The
effects are devastating. Many employers
overlook someone who's been looking for that
long. The emotional and financial costs can be
very damaging. Sadly, a higher percentage of
the unemployed fall into this category than
before the crisis or in prior recessions.

6. Real Unemployment: Real unemployment is not one of the types of unemployment, but
it's a term need to understand. Many people argue that instead of the “official”
unemployment rate, should use an alternate rate calculated by the BLS. This rate is called
the “real” unemployment rate, and it uses a broader definition of unemployment. For the
real unemployment rate, the BLS includes these three categories:
1. Marginally attached are people who haven't looked for work in the past four weeks, but
have looked within the past year. This category also includes:
2. Discouraged workers are those who have given up looking for work.
3. Part-time workers who would like a full-time job.
7. Seasonal Unemployment
Some sources include seasonal unemployment as a fourth type of unemployment. It is part of
natural unemployment. Seasonal unemployment results from regular changes in the season.
Workers affected by seasonal unemployment include resort workers, ski instructors and ice
cream vendors. It could also include people who harvest crops. Construction workers are laid
off in the winter, in most parts of the country. School employees can also be considered
seasonal workers
Instead, it adjusts its unemployment estimates to rule out seasonal factors. This gives a more
accurate estimate of the unemployment rate.

8. Classical Unemployment: Classical unemployment is also known as “real wage
unemployment” or “induced unemployment.” It’s when wages are higher than the laws
of supply and demand would normally dictate. It usually occurs in three situations:
1. Unions negotiate higher salaries and benefits.
2. Long-term contracts set a wage that has become too high due to a recession.
3. The government sets a minimum wage that's too high.
The result is that companies must pay more per employee, so can afford fewer employees.
Those that are laid off are victims of classical unemployment.
9. Underemployment:
Underemployed workers have jobs, but not working to full
capacity or skill level. This includes those who are working
part-time but would prefer full-time jobs and those who are
working in jobs being utilized. Underemployment is often
caused by cyclical unemployment. During a recession,
unemployed workers will take can to make ends meet.
Some definitions of underemployment include unemployment. Others include segments of
society that are not included in the standard definition of unemployment but are counted in
the real unemployment rate. Therefore, an understanding of underemployment is helpful to
get the big picture of unemployment.

CHAPTER – 02
UNEMPLOYMENT IN BANGLADESH
2.1Reason of Unemployment Problem in Bangladesh
Bangladesh is a small country with growing problems. Among all problems, unemployment
problem is a great one. The problem has spread its evil clutch all over the country. It is going
from bad to worse. All are getting concerned with this problems. There are many cause
behind it. The first and for most cause is over population. The population is growing very
rabidly. After independence, the population has been doubled. In respect of population, it is
eighth largest country in the world. The country cannot provide this huge population with
employment opportunities. So, many people fall into this problem. There are plenty of natural
resources in this country & are not properly used. This also creates the problem. There are
few mills and factories in this country.
A small number of people are engaged there. Besides, every year two or three mills are
closed due o economic loss. Thus the scope of employment is narrowing. Most people are
illiterate & not involved in productive work.
Also the cause is Educational system is defective. The present educational system is not fit
for practical life. Professional and vocational training is absent in this system. Beside students
nourish a false sense of self dignity & not keen to do manual labor. Rather like to remain
unemployed. There is no distribution of national wealth. It is also responsible for the
problem. Some people think that everything is predestined by God. So, there is use of try.
They like remain idle. The effects of unemployment problem are many. Drug addiction,
kidnapping, snatching, traffic jam and various types of social crime result in unemployment.
Economic depression is going to throughout the country. In the word, the country is lagging
behind from all quarters for it. No prosperity is possible for it.

Reason of Unemployment Problem in Bangladesh:
Unemployment means lack of job facilities for able-bodied persons both educated and
illiterate. It is a world-wide problem. No country in the world is absolutely free from the
problem of unemployment. In fact, it is a common phenomenon in almost all the countries of
the world- both developed and developing. Bangladesh is a developing country. It is trapped
in a serious unemployment problem. The rate of unemployment in Bangladesh is more than
25% of total population.
Unemployment occurs when there are more people looking for employment than there are
opportunities for employment. Many are the cause of unemployment in Bangladesh. Such as
-
1. Population growth: Bangladesh is a country of over population. There job facilities can
not keep pace with the increasing number of people. It is now counted as one number
problem of Bangladesh. Population has become a burden for the country instead of being
an asset. The rate of population growth at present is 21.6 per thousand which is quite
alarming.
2. Lack of industrialization: Bangladesh is very backward in industries. It can absorb only
a finger-counted number of people. Cottage industries have almost decayed. The
industries can hardly stand in the face of strong and unhealthy of the world competition.
3. Defective education system: Bangladesh education system is very defective. It has little
provision for vocational training for a learner. It fails to give him an independent start of
life. The number of educated unemployed people is increasing day-by-day for the cause
of the session jam in the higher educational institutions.

4. False illusion: There students and youths have false sense of dignity to become officers.
People think that service is more honorable than independent business. Hence it give little
importance to the dignity of manual labor.
5. Lack of skill: There is a serious want of skilled people in Bangladesh. The inventory
knowledge is fully absent in them. As a result, the unskilled people remain unemployed.
Again, the inequitable distribution of national wealth and concentration of wealth to a few
are creating unemployment problem directly or indirectly.
6. Lack of investment: Investment paves the way to create opportunities for employment.
But most of the people of Bangladesh are hard hit by extreme poverty and live from hand
to mouth. As a result, there is a tremendous lack of savings in the country. As there is
lack of saving, there is lack of investment. Again, the investors feel secured to invest
money in personal enterprises instead of public enterprises due to the political turmoil in
the country.
7. Lack of proper utilization of resource: The other countries people often joke
Bangladeshi as the 'Poor inhabitants of a rich country'. This paradoxical statement imply
that have not yet been able to brighten lot by making proper and best use of their huge
hidden natural resource. As a result, lagging behind much more the other countries of the
world in race of development.
8. Lack of positive belief and outlook: Bangladesh is beset with a serious problem of
illiteracy accompanied by superstitions. This problem is posing a great obs tackle to the
all-round development and progress of the country. Most of the people of there follow a
negative attitude towards life & mostly led by the belief in fortune and leave everything
to the will of God.

Unemployment problem is a great social evil for Bangladesh. It has given rise to various
social crimes. An unemployed man falls in the grip of poverty and loses mental peace. Life
becomes burden to him. A hungry man as well as an angry man & gets involved in different
anti-social activities. A proverb also goes, 'An idle brain is the Devil's workshop'. This
problem is getting more and more acute day by day. It is posing a great threat to the very
existence of the nation.
CHAPTER – 03
MITIGATE THROW TOURISM
3.1Unemployment Problem Mitigate throw Tourism
Bangladesh is most densely populated country with a partial resource. There are about 150
millions of people and 49 percent of them live under poverty line. Unquestionably,
unemployment is a Big Macroeconomic Issaue of Bangladesh.
Unemployment occurs when a person is able and willing to work but currently without work.
The prevalence of unemployment is usually measured using the unemployment rate, which is
defined as the percentage of those in the labor force who are unemployed.
According to a study of the International Labor Organization (ILO), the rate of growth of
unemployment in Bangladesh was 1.9 per cent in the decade of the nineties. But the growth
in unemployment currently is 3.7 per cent. The ILO figures also show Bangladesh in the
twelfth position among the top twenty countries in the world where unemployment is rising.

The number of the unemployed in Bangladesh now is estimated at 30 million. The way the
rate of unemployment is increasing, it is feared that at this rate unemployment would soar to
some 60 million by 2015. According to another estimate, every year some 2.7 million young
persons are becoming eligible for jobs whereas only about 0.7 million of them are getting
employment.
Unemployment Problem Mitigate throw Tourism:
1. Vocational Education: The Most Effective & Technical Method for the welfare of the
Bangladesh that focus on Special Vocational Education In Tourism Prospect for
Unemployment Reduction.
2. Modern Education System Apply: The First World Counties has already establish the
Modern Education System for their People even though In Education Curriculum
Germany, French, US, Australia has Install the Tourism Education.
3. Skill Development Programs: ILO is International Certified Global Skill development
authority for the Labor skill development during the work at workplace.
4. Foreign Language Development: French & Chinese Language recent years get more
popular & Brands in International Job Market Especially Translation of Language &
Culture.
5. Part-time Job Facility: To reduce the unemployment part-time job is one stop method to
develop the Primary level of Unemployment & it is quite famous in UK & Germany also.
But, still Bangladesh not establishes this in Formal way.
6. Job Security Insure: Job Security is most Important Point for the Job Seeker after the
entry in the job market especially for newbie. Effective Method should be take for this
Level for reduction of Unemployment problem.
7. Travel Agent Business Expand: Major Travel agent / Company in Bangladesh operate
their operation with limited man power & there were several Problems due to their
shortage of Training of Stuffs so, in this space Skilled & Trained People can entry the
Travel Job market & ensure the job.

8. Tourism Friendly Policy: Bangladesh Government should be special focus on tourism
friendly policy regarding unemployment mitigate issue.
9. Establish Powerful Tourism Authority: In Bangladesh there were no any Strong
Powerful Tourism Authority to take major decision for wellbeing of Tourism consider
unemployment mitigate.
10. Tourism Products Development: There are Hundreds of Tourism Spots in Bangladesh
like Chittagong Hill Tracks, Sundarban & many more places & those places/ spots should
be develop for the Tourism Development.
11. Ensure Strong Safety & Security: Security is a big issue for foreign Travelers so this
factor should be taken into special consideration.
12. Private Sectors Booming: The Private Sector Investment is the only way to Booming
the Tourism Sector in this Country.
13. Global Market & Bangladesh Tourism Tie-up: The International Hotels Brand &
Franchises is quite popular in Bangladesh in last 25 years to till present. By This
Possibility Bangladesh should be follow same Trends to Booming Tourism Brand.
14. Tourism Goal for 2030: The Government should be set a goal for upcoming 2030
Tourism Agenda to reach highest level of Foreign Currency throw Tourism to mitigate
unemployment problem.
RECOMMENDATIONS
Now Bangladesh is low-middle income country. Its average GDP growth rate is 6%. Many of
the people are illegally crossing border in the hope of better life. In order to improve
employment rate and to stop the illegal migration, government has to take and implement
some projects and policies, through this, it has to try to receive the social, cultural and
economic benefits of the tourism sector. As part of tourism Sector development, recently
government has passed the Cox’s Bazaar Development Authority (CDA) at the meeting of

Ministry. This is supportable but not enough. The government of Bangladesh should place
equal emphasis in its policy on the development of the tourist spots all over the country.
Following measures are necessary for the development of tourism sector in Bangladesh:
1. Up-date the present tourism policies in Bangladesh compare to the world tourism market.
2. Tourism spot and related organization should run by the private sector.
3. Tourism related discipline like hotel and tourism management should be start at the all
university in Bangladesh.
4. Infrastructures around the tourism sector should be built and maintained. Rail connection
between Cox’s Bazaar and Chittagong is necessary. Because, present communication
system is not enough for tourist attraction.
5. Political stability should be maintained to attract the foreign tourist.
6. Government should take the actions about the security system at the tourist place.
CONCLUSION
Unemployment is an issue which does not exist in just one location. On the contrary it is a
global phenomenon which affects a number of places across the globe. Even the most
developed countries in the world have to deal with this issue. Unemployment is a problem
which affects not just individual people but the financial and economic condition of a whole
country. It is for this reason that countries try their best to have proper economic policies so
that at no point in time & find in a problematic situation. Once anybody find own self in
financial trouble getting out of it is no easy task at all.

REFERENCES
1. www.google.com.bd
2. https://www.economicshelp.org/blog/2247/unemployment/definition-of-unemployment/
3. https://www.thebalance.com/what-is-unemployment-3306222
4. http://www.economicsdiscussion.net/articles/main-causes-of-unemployment-in-
india/2281
5. https://www.thebalance.com/types-of-unemployment-3305522
6. Article Source: http://EzineArticles.com/6353268
7. Lawrence H. Summers, "Unemployment," The Concise Encyclopedia of Economics,
2008, Library of Economics and Liberty.
8. "Long Term Unemployment," CNN Money, June 14, 2012.
9. Rich Morin and Rakesh Kochhar, "The Impact of Long-Term Unemployment," Pew
Research Center, July 22, 2010
10. http://forum.daffodilvarsity.edu.bd/index.php?topic=2999.0
11. http://researchleap.com/tourism-in-bangladesh-present-status-and-future-prospects/

Unemployment problem in Bangladesh Tourism economics

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