Unemployment occurs when there are fewer jobs than jobs. Also, the employment of workers is reduced due to the introduction of new, especially automated, technologies.
A sharp increase in unemployment is observed during a recession. This happens when production volumes are reduced and a lot of people who are laid off from work get on the market.
To better understand the essence of this concept, it is necessary to consider the causes and types of unemployment.
So, the reasons are:
1) due to the fact that food products are produced in arithmetic progression, and the population is growing exponentially (but here there is a “natural” regulation of numbers - an epidemic, war, natural disaster);
2) losses in the workplace;
3) new unemployed (graduates, for example).
There are voluntary, forced, structural, cyclical, latent, chronic and frictional unemployment. This is not all of its species, but the most often distinguished in the economy.
Voluntary unemployment involves the dismissal of an employee of his own free will. Forced is associated with a reduction in production, as a result of which part of the staff is unemployed. Structural unemployment occurs when some industries contract and others appear, when during the reorientation of companies and their transition to a new product, there is a need to retrain employees or reduce some and hire new ones.
Cyclical unemployment appears when business cycles change. It is constantly changing in scale and composition. The artisans, farmers, and workers who are not full-time are hidden . And chronic unemployment is constant and massive.
Frictional unemployment is a mismatch in the time of transition of workers from one enterprise to another. This also happens when moving from one profession to another, from one industry to another. Frictional unemployment is, one might say, the most undesirable type of unemployment. People are looking for and expecting work, moving from one locality to another, moving from one duty station to another.
Frictional unemployment is the lack of work associated with the objectively necessary movement of labor. This also happens with the change in the social status of the employee. Several situations can be considered in order to better understand what frictional unemployment is. Examples:
- dismissal in order to change the profession;
- the employee moves to another locality and, accordingly, he has to resign from his former place;
- the desire to get a job in another enterprise in the same specialty.
Unemployment has social and economic consequences:
1) the volume of gross national product lags behind the possible;
2) employee qualifications are lost over time.
During the natural level of unemployment, we can talk about effective employment, which means some correlation between unemployment and employment. It can be said that a high unemployment rate and full employment are contraindicated in the market system.