Types of Unemployment

• Seasonal Unemployment


  Occurs as certain seasons come to an end and labour is not required until next year.
• Structural Unemployment


  Happens due to a lack of skills or advancements in technology. Happens when the structure of the economy is changing. Structural Unemployment can lead to under-employment as people are willing to work part-time hours in order to earn an income.
• Frictional Unemployment 


  This is usually short-term an is between jobs. Workers voluntarily leave their jobs in order to search for another one, with better working conditions or higher salary.
• Cyclical Unemployment 


  This concept refers to how the only involuntary type of employment. This type of unemployment usually takes place when there is a recession or a lack of AD. In order to reduce costs, factories lay off workers, causing unemployment.
• Real Wage Unemployment 


  Occurs when wages are inflexible at a point higher than the free-market equilibrium wage. Usually caused by the existence of minimum wage laws. Higher wage creates an excess supply of labour and represents real wage unemployment.
• HOW MUCH OF A PROBLEM IS SEASONAL UNEMPLOYMENT?

  • Having a job for a particular time in the year, is better than having no job at all.
  • Seasonal workers might take on other part/full-time jobs and save during tourist season.
  • However, for those of low-income status, this will be very hard. They will be provide their salary for only one time of the year, but they need to pay their bills for every single month.
• Solutions for Seasonal Unemployment

  • try to diversify the economy
  • rules which say that seasonal workers have to be paid over the year.
  • Government creating jobs for the off season, so that seasonal workers can be employed.