Types of Unemployment

According to the latest statistics provided by the Centre for Monitoring Indian Economy, the jobless rate in India jumped to 7.2 percent in February 2019, the highest since September 2016, and up from 5.9 percent in February 2018. (CMIE).

Unemployment anywhere in the world occurs when a person actively looking for a job or other work is unable to find work and job. Unemployment is frequently used to evaluate the state of the economy.  The number of jobless persons divided by the number of people in the labour force, is one of the most used measures of unemployment and it is also called the unemployment rate.

What is Unemployment and Unemployment Rate?

Unemployment is defined quite precisely by the Bureau of Labor Statistics (BLS). Out-of-work employees must exhibit three characteristics in order to be counted as unemployed:

• They are not working, not even part-time or on a temporary basis.
• They are willing to work.

This last element is critical and frequently contentious. If a person stops seeking for employment, the BLS no longer considers them to be in the labour force or jobless. It does, however, describe them individually as “marginally tied to the labour force.” These are persons who have looked for a job in the previous 12 months but not in the previous four weeks.

Unemployment Rate

Divide the number of jobless people by the number of people in the labour force to get the unemployment rate.

Unemployment in India

India is a developing country that is underdeveloped, and its unemployment situation differs from that of advanced nations. According to Lord Keynes, unemployment in industrialised countries is caused by a lack of effective demand, which means that demand for labour reduces as demand for industrial products diminishes. However, India’s unemployment problem is not due to a lack of effective demand, but rather to a lack of capital equipment and other complementary resources, which is coupled with a high rate of population increase.

Types of Unemployment

There are 5 Major Unemployment

Cyclical

When natural business cycles cause job losses, this is referred to as cyclical unemployment. It’s not always simple to forecast, yet economies do experience changes. When the economy weakens and there isn’t much work, and there aren’t as many things being purchased, and individuals aren’t spending as much, the economy is on the verge of entering a recession. When the economy begins to improve and people begin to buy more goods, and everyone is able to produce more goods and hire more workers, this is referred to as an expansion. There are expansionary and deflationary cycles. During these natural business cycles, a recession will result in employment losses.

Frictional

Frictional unemployment happens when employees quit their previous jobs but have yet to find new ones.

Most workers quit voluntarily, either because they need to relocate or because they have saved enough money to hunt for a better position.

Frictional unemployment also arises when students hunt for their first job or when moms return to work. It also occurs when employees are dismissed or, in certain situations, laid off for business-related reasons, such as a factory shutdown.

Frictional unemployment is a temporary state that occurs as a result of the job hunting process. In reality, frictional unemployment benefits the economy by allowing employees to migrate to more productive positions.

Structural

Structural unemployment occurs when a worker’s skill set does not match the skills necessary for the jobs available, or when employees are available but unable to travel to the geographical location of the jobs.

A teaching position in America, for example, may need migration, yet the worker may be unable to get a work visa owing to visa restrictions. It can also occur when a technology development occurs in the company, such as workflow automation, which eliminates the need for human labour.

Seasonal

Seasonal unemployment is another sort of unemployment that you may have heard about. Seasonal unemployment, as the term implies, is caused by seasonal variations. Resort employees, ski instructors, and ice cream vendors are among those affected by seasonal unemployment. It might also include agricultural harvesters. In most regions of the country, construction workers are laid off during the winter. School staff are also classified as seasonal labourers.

Technological

While technical unemployment has existed for a long time, there has been a significant increase in recent years as technology has grown at a rapid pace. Consider how we discussed seasonal work previously. If you were a farmer and could have a cotton gin come and bail all of your cotton, you wouldn’t need as many employees labouring for as long. You wouldn’t have to spend days or weeks threshing wheat and collecting it all up if someone came in with a wheat thresher. You may complete everything in a single day. You wouldn’t need to recruit any additional personnel to assist you with this.

Conclusion

Unemployment anywhere in the world occurs when a person actively looking for a job or other work is unable to find work. Unemployment is frequently used to evaluate the state of the economy. The number of jobless persons divided by the number of people in the labour force, is one of the most used measures of unemployment and it is also called the unemployment rate. India is a developing country that is underdeveloped, and its unemployment situation differs from that of advanced nations. However, India’s unemployment problem is not due to a lack of effective demand, but rather to a lack of capital equipment and other complementary resources, which is coupled with a high rate of population increase.