In politics unemployment in often a high profile issue, particularly in the event of a recession. Unemployment is generally defined as the condition of being able and willing to work but unable to find a job. The unemployment rate is an important economic indicator, and a measure of economic performance.
Economists define three types of unemployment
Why unemployment exists:
While ideally, an economy could achieve full employment this seems to rarely happen outside of times of war. The following are all reasons why unemployment is common in developed countries.
- frictional unemployment - which is the length of time people spend between jobs (for those with skills that are in demand).
- cyclical unemployment - refers to unemployment created by a recession (for those which skills for which there is temporarily a reduced demand)
- structural unemployment - long term unemployment (for those whose skills are not in demand)
- disposable jobs/disposable employees - both employers and employees find it convenient at times to change jobs/employees frequently.
- income support programs (including parents) make it possible to live without a job, or by only working part of the year.
- technological change frequently makes skills obsolete, particularly if there is a lack of post secondary education.
- unemployment is good for capitalism - (also called Marxian unemployment) having a reserve pool of labor ensures that there is competition for work, which helps keep wages and inflation down. Governments, if they choose can adjust their economic, stewsinc at eol.ca" class="wiki wiki_page">monetary or immigration policies to ensure that the number of job seekers somewhat exceeds the jobs available.
, self employment
, income support programs
, labour market
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