Economic Issues: unemployment

Unemployment is a situation in which some workers in the economy who are willing and able to work are unable to gain work. Economists classify unemployment into five categories:

Cyclical unemployment – cause by natural cycles of production within the business sector. When production is in a downturn, businesses do not employ extra workers, and in fact may lay off workers.

Seasonal unemployment – occurs because of changes in seasons. This type of unemployment is common in agricultural industries such as fruit picking and shearing.

Structural unemployment – is the result of structural changes in the economy and is caused when production shifts from one area of the economy to another usually due to changes in fashions or changes in technology.

Hard-core unemployment – refers to people who do not want to work, or who are willing to work, but are considered unemployable.

Frictional unemployment – refers to the time it takes people to search for new jobs or shift between jobs. This type of unemployment will always exist because workers are always changing jobs.


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