Unemployment Definition and Meaning

The term unemployment refers to the lack of work. An unemployed person is someone who is part of the active population (is of working age) and who seeks employment without obtaining it. This situation translates into the impossibility of working despite the person’s will.

Unemployment is synonymous with unemployment (a word little used in Latin America but very common in Spain) and unemployment. Four main types of unemployment can be differentiated: cyclical, seasonal, frictional and structural. See Abbreviation Finder for acronyms related to Unemployment.

Lack of work is called unemployment.

Types of unemployment

Cyclical unemployment is the lack of work during a time of economic crisis (ie recession). These are, in general, periods that are not too long in time and that are reversed together with the reactivation of the economy.

Seasonal unemployment arises from the seasonal fluctuation of supply and demand. The agricultural sector offers a clear example of this type of unemployment: at harvest time, the labor supply increases and unemployment tends to disappear; in the rest of the year, the reverse situation occurs.

Frictional unemployment takes place due to the lack of agreement between employee and employer. The characteristics of a job do not satisfy the worker and he leaves one job in search of another. This is temporary unemployment and is usually constant.

Structural unemployment, finally, is the most serious since it involves a technical mismatch between the supply and demand of workers. The jobs that an economy requires are less than the number of people who need work. This situation requires the intervention of the State to solve the imbalance.

Unemployment can be structural, seasonal, cyclical or frictional.

Economic growth, a necessity

Unemployment is the consequence of a series of wrong legislations. Which caused employers, who in the beginning were extremely enthusiastic, to have lost that illusion and, discouraged, have reduced their production interests.

The labor market of a society is managed on the basis of growth. If the number of applicants for a given job increases, new jobs need to be created as well. And, for this to be done, the economy needs to grow at the same rate as the number of people looking for work.

It is a circle that is nourished by its different components. If one of these fails, there is a gap that results in excess employment or unemployment: people who are left unable to aspire to a job because the market has stagnated.

Plans to alleviate unemployment

To solve this problem there are no other alternatives than a revision of the laws and an economic planning that promotes growth. If governments do not opt ​​for this type of measure and, instead, prefer to create subsidies to help those who are unemployed for free, they are covering up a specific problem in the now without foreseeing tomorrow. When these people have exhausted the time in which they can receive these subsidies, they will try to re-enter the labor market without success and the problem at that time will be worse.

If, on the other hand, the government plans bet on economic growth, using the money from the subsidies in the creation of laws that enact growth and encourage employers to improve production; possibly in a longer time, but also more effective, favorable results may be obtained.

In most countries there are plans to help those who have been victims of unemployment; because in the place where they worked they have reduced the workforce or because due to certain circumstances they have been left out of the market. These economic aids are calculated based on what these people have invoiced during their active period. In any case, it is necessary to point out that they are not intended for the people who need the most, since to access them it is necessary to meet a series of conditions. Therefore, even at this point this type of solution to unemployment would not be valuable.


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