DEFINITION Unemployment refers to a situation where a
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DEFINITION • Unemployment refers to a situation where a person willing and able to work cannot find a job.
EFFECTS OF UNEMPLOYMENT • Unemployment has a number of negative effects: Ø Wasted resources – workers are a resource, so their ability is wasted. Ø Lost output – the production that they could have produced is lost forever. Ø Lower income and lower standard of living for the unemployed. Ø Low self-esteem for the unemployed. Ø Less government revenue from taxation (income tax and VAT). Ø More government expenditure on social security benefits. Ø Slow-down of the economy.
TYPES OF UNEMPLOYMENT • FRICTIONAL UNEMPLOYMENT – This is that type of unemployment which occurs when a person voluntarily leaves a job in search for another job. It is that period until the unemployed person finds a new job.
TYPES OF UNEMPLOYMENT • SEASONAL UNEMPLOYMENT – This is that unemployment which occurs with the change of seasons when certain activities are reduced or stopped. • For example, people working in the catering industry who may lose their jobs in the winter period. • Or beach boys (or pool boys) who lose their job when summer is over.
TYPES OF UNEMPLOYMENT • CYCLICAL or GENERAL UNEMPLOYMENT – That unemployment which is created when there is a slow-down of the economy. • This type of unemployment would be spread across the economy. • It could be the result of a down-turn of the economic cycle (thus the name cyclical unemployment).
TYPES OF UNEMPLOYMENT • STRUCTURAL UNEMPLOYMENT – That unemployment which occurs when there is a change in the demand pattern or the method of production. • For example, when people started to use buses as a means of transport, cab drivers and boat rowers lost their job. • When we started to use bricks only to build houses, stone dressers (naġġara) were no longer required.
TYPES OF UNEMPLOYMENT • TECHNOLOGICAL UNEMPLOYMENT – This could form part of structural unemployment. It is that unemployment which occurs when machinery and technology take place the work of people. • For example: ØWhen computers took the place of clerks. ØWhen accounting software reduced the need for accounts clerks. ØWhen motorised mowers took the place of physical work in fields.
TYPES OF UNEMPLOYMENT • REGIONAL UNEMPLOYMENT – This is another form of structural unemployment. It occurs when there is a fall in the activity of an industry that is heavily concentrated in a particular area or region.
