ECON 101: Types Of Unemployment

The definition of an unemployed person is someone consisting of working age,  jobless, able and available to work, and actively looking for a job. 

In Turkey, unemployment is a suffering that no graduate is wondering. According to TUİK(2021, January), the unemployment rate is 12,7 percent; the age scale between 15-23 has its unemployment rate of 25 percent. That means 1/4 of the young generation can’t earn 50 cents while listening to 50 Cent!

Before getting into the types of this mess(which is sometimes good for the economy), I will explain a few terminologies accordingly.

The labor force: The labor force, or workforce, is the total number of people who are currently employed plus the number of people who are unemployed and looking for their employment. The official unemployment rate measures the jobless who are still in the labor force.

Discouraged workers: Discouraged workers are those who want and are also available for work, but dropped out of the labor force because they believe there aren’t any jobs for them. It is an emotional state that determines the whole State! Discouraged workers are not counted as unemployed and not included in the unemployment rate.

The real unemployment rate: Don’t get twisted because I had written ”real”, it is another term. This term is simplified as unemployment rate+ the marginally attached and discouraged workers. Just for the information, the calculations are effectuated by using the unemployment rate.

Types of unemployment

In classic Macroeconomics, there are 4 types of unemployment:

• Frictional unemployment: Caused by temporary transitions in workers’ lives. It transpires when a worker moves to a new city and has to find a new job. Frictional unemployment also includes people who just entering the labor force, such as recently graduated college students. Frictional unemployment is the most common cause of unemployment.
• Structural unemployment: It occurs when the person has the skill X and the job demands the people whose skills are Y.  The skillset and the job they are looking for are in dissonance. Technological development has the most impactful effects on this type of unemployment.
• Cyclical unemployment: When demands decrease, cyclical unemployment naturally increases. For example, car prices go up in a bad-mood economy(I will use more technical terms henceforth, stay with me for now).  During this mood, people are buying fewer vehicles, so the manufacturer doesn’t need workers that he used to uphold the demand. Therefore cyclical unemployment occurs.
• Seasonal unemployment: This category can include any workers whose jobs are dependent on a particular season. Farmers usually fit because crops are harvested mostly in the fall.

This is the first part of the Economics 101 series. I firmly believe that when we are more informed about the economy, the unemployment rate moreover the real unemployment rate will decrease drastically. I will write about economics as entertaining, simple, and wholesome as possible, for this purpose.  Thank you for reading my content.

SOURCES

Amadeo, K. (2020, August 30). Why it’s harder to find a job now in some industries. Retrieved February 06, 2021, from https://www.thebalance.com/structural-unemployment-3306202

www.masterclass.com

(www.dw.com), D. (n.d.). Türkiye’de Ekim dönemi IŞSIZLIK ORANI Yüzde 12,7 oldu: Dw: 11.01.2021. Retrieved February 06, 2021, from https://www.dw.com/tr

What is the labor force. (n.d.). Retrieved February 06, 2021, from https://www.bamboohr.com/hr-glossary/labor-force/