Login with Facebook
Close

Unemployment

Economic growth and development are one of the main concerns for the global society. And there are different factors that determine how good of poor an economy is, among them the unemployment rate. Whenever the subject of economic growth and development comes up, unemployment is always one of the main problems causing negative growth. During an economic peak, the rate of unemployment, among other factors, is at their lowest. And when the economy is doing bad, it is always unemployment at the top as one of the highest contributors to further deterioration.

What is unemployment?

The term unemployment may seem like an easy thing to understand. But you will be surprised to learn that there is so much to it than meets the eye. For economic students, it is crucial to understand not only what unemployment is, but it causes an effect on the general economy. There are different types of unemployment that goes beyond just being without a job. Unfortunately, this is what many people think about when they hear the term unemployment.

The best way to approach this term is by defining it as individuals are ready to work, they have all the right skills available to work, but they cannot find a job due to different factors. This is just the most basic explanation, which comprises of people, or groups of people, who don't have a job. Looking beyond this, unemployment also encompasses people in the workforce or pool of people who are ready for work, yet they don't have an appropriate job. The unemployment rate is determined by dividing the number of unemployed people by the workforce's total number. And as mentioned earlier, it serves as one of the main indicators of economic status. Good economies fight to reduce this rate to the lowest levels. Unemployment cannot be completely eliminated in any economy, but it can be significantly reduced to ensure the largest number of people are working.

The relationship between markets and households plays one of the biggest roles in economic growth. Scarcity is the biggest problem facing modern consumers, where they don't have enough resources to meet their growing demands. The industries use the raw material to produce the basic needs necessary for living a standard life. And because the production process is expensive, firms sell these products are prices that recover their input as well as make some revenues for them. This means households will still need money to access and use such products. For this to happen, they will need to find a job first and work for the items. Finding a job is not very easy, especially in the modern economies where supply for labor is on the rise, whereas demand keeps declining.

The truth is, "Unemployment" is a tricky word that can be very confusing. It is certain that it includes people who are waiting to go back to work after being discharged before. It included those who have stopped looking for a job due to various reasons, like pursue higher education, retired, disabled, or they just gave up. These are no longer included in today's definition of the term. Also, people who are not actively looking for a job, yet they would want one that is not considered in this curve.

This is why there are different categories of employment and unemployment. It is even more interesting to note that those who have not looked for a job in the past one month but have actively don't so in the past 12 months are categorized under a group called 'marginally attached to the labor force,' within which there is a category of 'discouraged workers.' Discourage ed workers are those who have just lost hope in finding any job, and hence, they are not looking for any. Many companies lay off some workers in a state of economic depression, and finding employment is not very easy. This is why some job seekers give up on their job-hunting and live freely.

The unemployment rate is often represented with so many details and inclusions, such as the one mentioned above. And therefore, some experts argue that vague and cannot be used to represent the true number of people who are not employed. They argue that there are so many people left out who jobs have jobs, yet they would love to have some because all the tiny details added in this definition. There may be some truth in this idea, especially since many experts have supported it. And for this reason, it would be a good idea to search for 'employment instead. The Bureau of Labor Statistics (BLS ) describes these terms individuals who are aged 16 and above and who have been recently put into work in the past one week and received compensation, or otherwise, due to self-employment. With this definition, everyone else who left out is considered unemployed.

Types of unemployment

Unemployment is the biggest threat to economic growth and development. As stated above, economies that seek for real growth focus on reducing it to the lowest levels possible. In the developing world, unemployment is majorly determined by the political environment of the time. This is also one of the main reasons the term becomes a bit complicated. However, in the types of unemployment, you can get a clear picture of what it really means.

Unemployment is divided into four main groups, as discussed below.

Demand deficiency unemployment

This is perhaps the most popular type of employment. Many people understand that there are not employment markets that are not demanding labor. Economies go through constant cycles where sometimes it is experiencing positive growth, and on other times it is low, experiencing negative growth. During the negative growth, markets find it hard to keep up with production costs; therefore, they cannot produce more, but less, and cannot employ; rather, they stop some workers. This is one of the biggest effects of a recession. Some market even fails, leaving their workers stranded with nowhere else to turn to.

Consider the 2008 financial markets failure the led to the Great Recession that followed. Before this, the American economy was in a bubble, especially in the housing industry. These properties' prices kept rising, which gave false indicators to financial markets that this was where good investment lay. They relaxed their lending terms and did not consider properly whether borrowers had the ability to repay the loans. And the prices dropped abruptly, making it hard for borrowers to repay the loads. Lenders were unable to recover their money from the properties because of the depreciated values. This situation led to the fall of many companies, and the effect was felt across the globe. The rate of unemployment went through the roof for the next few months.

Friction unemployment

Friction unemployment can be easily looked at as temporary unemployment for a worker who is between jobs. Consider, for instance, someone who recently quit or was fired from a company they were working for and is searching for a job in an economy that is not under a recession. This is not a bad thing because the workers that cause it are probably looking for something that suits their skills. We said above that unemployment is one of the most confusing subjects because of the many details. Hence understanding it requires that you know these terms and what they stand for.

Structural unemployment

As the name suggests, structural unemployment has to do with an organization's structure in terms of employee skills. This is when the skills set of a worker does not match the demands of the job they are doing. It can also be when the worker fails to reach the geographical region of the job. For instance, someone may find a job the requires they relocate to German, but they cannot secure a work visa due to some policy restrictions.

There are other ways through which structural employment can be affected. This includes when there is a change of organization, such as workflow automation. For instance, a tea company A in Kenya buys machines to plug tea instead of using human force. When this happens, many people will lose their jobs, and it will be hard to find another proper employment since this an unskilled labor market.

Voluntary unemployment

This is another type of unemployment that causes a lot of confusion. How can some who has refused to work be unemployed? This type is common when a worker quits their job because it's not financially fulfilling anymore. For instance, if one discovers that their take-home pay is less than their cost of living, they may choose to leave the work searching for something better. Many people have experienced this type of unemployment though it is most just temporary since they may have already found something better.

Full employment vs. the Natural Rate of Unemployment

Governments always struggle to make sure their citizens are employed. Economists used different measures to identify or create employment opportunities as a way to curb the harsh results of economic downturns. They define full employment or the natural rate of unemployment as a state where all unemployment is structural and frictional. A healthy economy is defined as a lot of jobs. Also, cyclical and season unemployment can be expected to be the lowest.

Friction and structural unemployment cannot be expected to hit zero at any time. It does not matter the economy is at its best times or the worst. You always find between jobs. Also, technological changes have become a common trend with modern firms, as well as firm changing locations. Hence, avoiding these two types of unemployment is almost impossible. It is crucial to get the definition of employment correctly because governments apply this rate when determining how much stimulation the economy needs. According to the Keynesian theorists, there is likely to be inflation in the economy if unemployment rates fall below the natural rate of unemployment. On the other hand, if there is a proper increase in this rate above the normal, the government risks falling into stagnation, in which case, a stimulation of the economy is recommended.

Cause of long-term unemployment

We have seen what unemployment is, and its categories, helping us gain understanding. But for better comprehension, it is critical to take at the cause of long-run unemployment. Short term unemployment is not much concern since it is easier to recover from it. There are two main factors that cause this state, as seen in empirical evidence; one if welfare payments and the other is unemployment insurance. Both of these are government assistance programs that play a substantial role in long term unemployment.

Note a negative shock in the economy majorly causes short-term unemployment. When there is a recession in the economy, a firm rush to lay-off some employees and reduce production. But as things begin to normalize, they employ again and increase production.

For long term unemployment, government assistance prompts individuals who are not working to claim that they are looking for a job, even when they are not. People who would otherwise not be taken as part of the workforce are incentivized to register. These figures are all considered the unemployment rate.

Also, the government assistance programs provided incentives, which may mean not work. An employed person has a minimum wage they can insist on getting before getting a job. This 'reservation wage' is increased insurance and other social assistance programs, which makes unemployed people hold onto their status for longer.

In the past, it was thought unemployment is costly to a jobless person, but if you don't know your calculations well, it is not as much as an issue for them.,

Unionism is another cause of unemployment in the long-run. When high union wages are above the competitive market rate, they can easily cause job losses in their economic sectors.

Unemployment is a big issue for any economy. It threatens growth and development. Even though it cannot be fully eliminatedUnemployment, governments should try coming up with strategies that reduce high rates.

Author: James Hamilton


Need a custom
essay?

We will write it for you.
Order now

Free Essay Examples

Free essays:

All you need to know about Neuroendocrinology
All you need to know about Big data management
All you need to know about digital special effects
All you need to know Technical Writing?
Basics the Game Theory in Cryptoeconomics
Business innovation ideas for making money
Biosensors for cancer diagnosis
Business Analysis: Pricing strategies and Demand Curve
Cognitive Computing- How does Cognitive Computing work?
Consciousness: characteristics and peculiarities
Conservation Economics
Cybersecurity in business: challenges, risks, and practices
Demographic trends and how they affect Economic Growth
Dance as an art form and entertainment
Discrimination Economics
Determinants of Wages
Everything you need to know about short-term memory
Economic and Policy Impacts of Demographics
Ethics: an essay on the understanding of evil
Emotions: what are they? Theories explained
Factors of Demographic Data Collection
Factors Affecting Purchasing Behavior
Financial Statement Analysis
Factors Influencing Interest and Exchange Rates
Government's Intervention in The Labor Market
Guide on the Pathways of the nervous system
Game theory in microeconomics
Globalization: definition, causes, social impact and risks
How Relativism Promotes Pluralism and Tolerance
How to use the audience’s feedback to write a news report
History of silent cinema
How news report can be strengthened through multimedia
Introduction to Population Problems
Imperfect Information and Asymmetric Information
Imperfect Information in Insurance
Introduction to Labor Markets
Journalism: What is News?
Journalism: Broadcast media and Television Presenters
Journalism: Sources of News
Journalism and Law
Key Determinants of National Income
Key Factors That Affect Pricing Decisions
Kinetic models in biology and Related fields
Know about the different forms of traditional African dances
Latest technology trends
Latest dance trends
Magnetoencephalography (MEG)
Microeconomic Analysis to the Demand for Labor
Neuromuscular disorders
National Economies, Fluctuation, and Responses to Fluctuations
Neurotransmitters: what they are and different types
Nanomedicines to target tumors
Objections to utilitarianism
Organizational motivation and its effects
Overcoming Hiring Challenges for Nonprofit Organization
Population Demographics
Recurrent neural networks (RNN) for speech detection
Russian School of Mathematics
Research and Development
Risk Sharing in Insurance and Asset Markets
Stochastic optimization methods in deep learning?
Structure of the nervous system
Structure of a Corporation
Schizoaffective disorder: how to live better with it
The climate change denial
The techniques of basic cinematography
The Endosymbiotic Theory
The Role of Internal Audit in Corporate Risk Management
Unions
Unemployment
Utilitarianism Vs. Kantianism
Understanding Auctions and Auction Theory: Part 2
Various theoretical perspectives of sociology
Virtual reality, what it is and how it works
What are the linear models in machine learning?
What is Convolutional Neural Network
4 Facts about Origin of Mathematics!
5 techniques to create an animation
10 emerging technologies according to World Economic Forum
10 strategies to maximize corporate profits
3d Model Of Building
6 Medical Technologies that revolutionized the healthcare in 2020
All you need to know about the ACA Code of ethics
Architecture and Democracy: An Introduction
Architecture and Democracy: Democratic Values
Architecture and Democracy: Democratic Procedures
All You Need to Know About a Synthesis Essay
An essential guide to understanding Film Theory
Application of Artificial Intelligence in Cyber Security
Applications of electrical engineering
Augmented reality: what it is, how it works, examples
Advantages And Disadvantages Of Social Networking
All you need to know about Cryptography
Applications of astrophysical science
All you need to know about architecture engineering
Applications of geological engineering
Artificial intelligence and medicine: an increasingly close relationship
An insight into Computational Biology
ACA code of conduct
A Rose for Emily
Applications of Mathematics in daily life
Architecture mistakes to avoid
All you need to know about Toxicology
All you need to know about Holistic Medicine
All you need to know about linguistics
An introduction to Linguistics and its subfields
All you need to know about Anxiety disorder
All you need to know about Drones
A Brief Insight into Political Science
Assumptions related to feminism
All you need to know about Byzantine emperors
All you need to know about labour economics
An insight into xenobots -the first-ever robots
An ultimate guide about Biomaterials
A Comprehensive Introduction to the Mona Lisa
Analysis methods of Transport through biological membranes
An ultimate guide about biochemical reactions
Analysis of brain signals
Artificial Gene Synthesis
Application to synthetic biology of CAD methods
All you need to know about metabolic pathways
Applications of BIOMEMS
All you need to know about the epidemiology
Asian vs. western leadership styles
All you need to know about Smart prosthesis
Analysis of Economy: Output of Goods and Services (GNP), and GDP on Economic success
A Guide to Pricing Strategies
An Overview Of Economic Studies
Analysis of Fiscal and Monetary Policies
Analysis of Business Cycles
Analysis of Consumption and Investment
A Look into Regression Analysis
Analysis of Household's Consumption and Savings Behavior
All you need to know about Capital Budgeting
All you need to know about risk management
Art looted in wartime.
Appropriate use of Data in Economics
All you need to know about reaction kinetics?
A historical overview of Financial Crises
All you need to know about management discipline?
An insight into the error-correction models
All you need to know about Data visualization
All you need to know about Work-family balance
All you need to know Technical Writing?
All you need to know about digital special effects
All you need to know about Big data management
All you need to know about Neuroendocrinology
How to Write a Personal Essay
Housing Needs in America
How to Write a Description Essay
How to Create an Excellent Scholarship Essay?
How to write a cause and effect essay
How to Hire the Best Essay Writing Service Provider?
How to Write a College Application Essay?
How to get the most out of your English lectures
How to write Expository Essay
How to succeed in your psychology class?
How to Write an Academic Essay in the Shortest Time?
History of Journalism
How Different Sectors are Using Artificial intelligence (AI)
How to write an informative essay
How to deliver persuasive essays?
How to Give a Convincing Presentation
How to write an essay on leadership?
Historical Art Still Around Today
Humanoid robot: what it is, how it works and price
History of Chemistry
Healthcare Advanced Computer Power: Robotics, Medical Imaging, and More
Healthcare AI: Game Changers for Medical Decision-Making and Remote Patient Monitoring
How to understand different types of English
How to Cope with Chronic Pain
How African American choreographers and dancers have influenced American dance
How mobile robot can do in logistics or in production
How To Become a Successful Entrepreneur
History of the Philosophy of Feminism
How is the climate changing?
How to Track Your Content Marketing ROI
How to Gun control In the USA?
Historical and contemporary role of labour in the modern world
How breast cancers are classified?
How the cells of our body communicate?
How the Lymphatic System Works?
How Digestive System Works
How to complete your capstone projects effectively?
How to write a research project
Healthcare technologies that help patients with better self-management
How to choose the topic of the senior capstone project
How to make your business survive at economic crisis
How can immigrants blend in the American society?
How does the economics of war affect society?
Hate speech on social media.
How to Build an Economic Model
How to start a healthcare startup?
How can financial illiteracy harm you?
How cancer is developed - Cancer biology
How to define the Enterprise Value
How to conduct economic research?
How women can manage sexual harassment
How to use quotes in your news reports?
How news report can be strengthened through multimedia
History of silent cinema
How to use the audience’s feedback to write a news report
How Relativism Promotes Pluralism and Tolerance
Introduction to Urban Studies
Importance of dance in education
InMoov: how to build an open source humanoid robot
Importance of KYC verification to making the Blockchain secure
Importance of Rhythm
Importance of dance student evaluation
I/O control methods -types and explanations
Identity theft: what to do?
Introduction to Utilitarianism
Importance of 3d Modelling in Architecture
Importance of online journalism
Image processing in medical diagnosis
Introduction to USA Politics
Introduction to Comparative Politics
International Relations as a Major in Political Science
Importance of modern trade policy
Introduction to Journalism
Introduction to Writing a TV Script
Introduction of Microfabrication techniques
Introduction to Microeconomics
Interaction of Consumer and Firm Choices in Markets
Importance of corporate sustainability
Issues in International Monetary Macroeconomics
Introduction to Statistics and Data for Economics
Introduction to Data and Probability for Economics
Introduction to the Game Theory
Introduction to Econometrics
Introduction to Economic Information
Introduction to Market Equilibrium
Introduction to Economic Models and Application
Introduction to Empirical Research
Introduction to Econometric Data
Importance of Critical Thinking, Principles, and Goals
Introduction to Identification and Causal inferences
Introduction to Econometric Application
Intermediaries and Government in Financial Crisis
Importance and seven principles of quality management
Illiteracy in the USA
Introduction to Economics of Law
Introduction to Coase Theorem
Introduction to Social Choice and Incarceration
Intellectual Property and Product Liability
Investment in Human Capital
Introduction to Labor Markets
Imperfect Information in Insurance
Imperfect Information and Asymmetric Information
Introduction to Population Problems
The Looming Energy Crisis in America
Top benefits of performance-based engineering
The More Languages You Know, The More Times You Are a Man
Things to consider while writing an Argumentative Essay
Top Ways to Improve Your Academic Writing Skills
Tips to Excel in Creative Writing
The origins of films in the early 19th century
Top career options in Architecture
The Elevator Pitch
Top finance trends 2020
The basic Structure and functionality of robots
The Way to Success
The election system of the President in the United States of America
Two-party System in United States of America
Top trends in urban design
The history and theory of African American filmmaking
Top benefits of creative writing
Tinnitus Guide: Common Symptoms and Treatment Options
The language of dance
The digital image processing management
Top famous politicians of the World
Top methods of political science!
The history of the feminist movement
The blood flow in cardiovascular system - Biofluid Mechanics
The best of Leonardo Da Vinci
The Structure and Function of Macromolecules
The structure of cell: a research on the bricks of the human body!
Tissue and organ construction: Adhesion and recognition between cells
The kinetics of the transformation processes
The Modeling of Biological Systems
Tips for writing a great thesis statement
The Defense mechanisms against infections
The impact of the technological innovations in medicine
Top journalism trends to know about
The relation between mass media & politics
Theranostics: Diagnosis and Care through Nanoparticles
The practical Applications of X-rays
The applications of Ultrasound in medicine
Transfer mechanisms of genetic information in Bacteria
The regulation of cellular metabolism in the diagnosis
The Principles of MRI Contrast agents
The technical basis of optical coherence imaging
The New Media: Emerging Trends
The Structure of Interest Rates and the Yield Curve
Technological perspectives and reflections of neural engineering
Types of bioreactors and their applications
The Role of Government Policy in Improving Economic Outcomes
Types of corporate responsibility
The Role of IMF in International Monetary Macroeconomics
Tools for investment decision making
The concept of Organizational Culture and its applications
The Conduct of Monetary and Fiscal Policy
The Basics of Financial Accelerator Models
Tips for labeling medical devices- Medical Entrepreneurship
The different medical imaging techniques
The Economics of Uncertainty – Introduction
Theories of Public Policy
The Game Theory in Social Media
The political theory of Thomas Hobbes
The Use of Law on Economics and Vice Versa
The Role of Internal Audit in Corporate Risk Management
The Endosymbiotic Theory
The techniques of basic cinematography
The climate change denial
What is a Definition Essay?
What are diagnostic essays?
What is the relation between art structural engineering?
What is a Narrative Essay
What are robotics and intelligence systems?
What are the benefits of studying health sciences?
What is artificial intelligence and why it matters?
What is comparative Literature?
Why study neuroscience
What is Wi-Fi and how does it works
What is French history famous for?
What are Humanistic Studies?
What is covered in Biophysics?
What is modern journalism?
What is Virtualization? Benefits & Applications
What are modern public relations?
What is plasma physics?
What is teacher preparation?
What is rapid prototyping for 3D printing?
What is contemporary European Politics?
Why should you learn American Ballet?
What is engineering physics?
What is the purpose of African American Literature?
Ways to learn the Rhythm
What is digital art used for?
What are Enzymes and how do they work
Who is the father of political science?
Why Study Political Science - Job?
What is the Philosophy of Feminism?
What is a quantum computer?
Ways B2B Startups Streamline Their Conversion Strategies
Why do biomedical signals need processing?
What are the long term effects of climate change?
Why study labour relations
What is Holoprosencephaly?
What is antisocial disorder?
What are the important principles of evolution?
What is the cytoplasm and its function?
What is biopolymers?
What Makes a Good Leader
Women empowerment in modern generation
What is the history of political thought?
What is Gene recombination
What is synthetic biology
What is business cost analysis?
What is Inflation
What are the consequences of unemployment?
What is lithotripsy and its types?
What is transition elastography?
What is the purpose of deep brain stimulation?
What is a Brain-Computer Interface (BCI)
What is neuroethics?
What is Market and Supply and Demand
What is optogenetics?
What are the techniques to record brain activity?
What happens if the interest rate increases?
What is immunotherapy?
What is the economic role of the financial market?
What are the factors behind illegal immigration?
What is the lymphocyte activation?
What is financial market and its types?
What is the structure of financial markets?
What are the methods of measuring business performance?
What is the Credit market?
What is business ethics and code of ethics
What are the Causes of financial instability?
What is MBA with Concentrations
What is regenerative medicine?
What is Population ecology?
What is Microfinance: evolution, and practices?
What is biotechnology and its applications?
What are Workplace diversity and its benefits?
What is the difference between a leader and a manager?
What Is Branding and best branding Business strategies?
Why are microelectronics important?
What are biologic drugs.
What is the Foreign Exchange market?
What is the role of scientific research in times of crisis?
What are the risks of international trade?
What is financial management?
What is gene therapy?
What is education economics?
What is regression analysis, and why should you use it?
What Is Technology Marketing And How Should It Work?
What is Management Accounting
What are the methods of valuation of companies?
What is Immune System and Immunotherapy?
What is big data analytics?
What is the 7 layers of OSI model?
What is Neuroplasticity?
What are Sculpture art and its types?
What are the different genres of films?
What is Transcranial magnetic stimulation (TMS)?
What is TES-Transcranial electrical stimulation?
What is Relativism?
What is Vaccine skepticism, and what to do about it?
What happens in the brain when learning?
What is the deep neural network?
What is Convolutional Neural Network
What are the linear models in machine learning?