The Notion and Forms of Joblessness

In the article, we explain the main attributes of the notion of joblessness and give a short description of its forms.

The Notion of Joblessness

This is very topical for students. While writing your essay, remember that the sphere of work is an important and multifaceted area of the life of the society. It covers both the job market and its direct use in social manufacturing. The job market is rated by labor costs, conditions of this market in whole, including the valuation of wages, working conditions, access to education, professional growth, job security, etc. Job market reflects the most significant trends in the dynamics of employment, its basic structures, i.e. division of the work, mobility, the scale of joblessness.

The transition to the market relations causes the great difficulties, the emergence of many socio-economic problems. One of them – is the issue of the job, which fully connected with humans and their manufacture activities.

Joblessness as a Global Problem

Joblessness is a problem of a macro economy that exerts direct and the most powerful effect on every person in the world. Loss of work for the majority means lower living standards and causes serious psychological trauma. There is no wonder that the issue of lack of a job is often the subject of political debate.

One of the characteristic manifestations of negative macroeconomic instability is the availability of joblessness. Having no constant work is the process of reducing the number of the able-bodied forces that have a job.

The absence of work as a social phenomenon is an attribute of a market economy. It constantly worries society, requires a deep study of its appearance, causes attention from the administration at all levels and a thorough analysis of the economics.

Joblessness is a complex economic, social, and psychological problem. It makes economy inefficient and social relations – strained. In addition, a person, who has become unemployed, undergoes extreme psychological stress, loses the possibilities to realize his potential employee skills, and feels uselessness, inability to support themselves and their families, falls into depression and so on.

The high level of joblessness leads to social wars, political upheavals, and disturbances, destruction of a material and spiritual heritage of generations caused by despair. That is why the political power of any country cannot remain indifferent to the problem of the absence of work.

Main Categories of Working Population

It is considered to distinguish three categories of the population older than 16 years.

First category: working people, who have a constant job and those who also have a job but temporarily do not work for some reason (illness, vacation).

Second category: people who do not have an occupation but are actively searching for it.

Third category: people outside of workforce – students, housewives, and those who simply do not want to work regardless of what the cause may be. It is economically inactive part of the population.

Main Types of Lacking Job

There are several types of joblessness.

Structural joblessness

Technological joblessness is a lack of work caused by the fall in the demand for labor of a certain quality (qualification, profession, etc.) due to the main changes in the framework of social production. Usually, it is associated with technological progress, the advent of the demand for new professions, and it takes time and special training for their extension. It is forced step.

Frictional joblessness

Frictional joblessness is a short-term absence of job connected with the search for a new job or profession (the voluntary dismissal from the previous place of work), with massive layoffs and the loss of seasonal work. This variation also can include joblessness among young people, first-time job seekers. It is voluntary and on the relatively short duration.

Cyclical joblessness

Cyclical joblessness is the rate of the job lacking, generated by cyclical fluctuations in the economic activity when there is a relative abundance of the economically active population. Especially, it is evident in the phase of the downturn of the economic system.

Cyclical joblessness is dangerous by the additional factor. Except for social disaster, it brings real losses for GDP. If the lack of job exists, some part of the economically active population will not be able to find the application of its labor force and make a contribution to the GDP increase. This ratio above has been called Okun’s Law. This law shows that the excess of the actual level of joblessness above its natural rate of 1% is accompanied by a delay of actual GDP from potentially possible by 2-3%.

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Additional Types of Joblessness

In addition, we can differ other types of joblessness. The first is a residual joblessness. It is a part (it is not taken into account in official statistics) of labor, which remains unemployed, even in conditions of full employment by virtue of a professional or moral inability to work. Another type of joblessness is hidden joblessness which is not taken into account in official statistics too (part-time employees, unemployed able-bodied in rural areas, etc.). Especially, it is characteristically for the agricultural sector of economics, where the production has seasonal character. The last type is voluntary joblessness. It is the proportion of the population that becomes unemployed for various reasons with the presence of livelihood and without them (the homeless, those who refuse to participate in social activities and others).

Natural Degree of Joblessness

The combination (sum) of frictional joblessness and structural forms are the so-called natural degree of joblessness or the level of the full employment and equilibrium joblessness. This is the level of joblessness, which does not depend on market conditions or government policies; it always exists as a kind of natural background. Survey of economists shows that there is some natural degree of joblessness, which is determined by the country’s productive capacity at this stage of extension. Therefore, attempts to lower the joblessness below the natural level are usually unsuccessful.

In various historical periods, the natural joblessness rate is not the same. It has a tendency to increase in the technological progress conditions and the high mobility of the workforce (in the 60s it was believed that the natural joblessness degree is at 4%, in the 90s – 5-6%).