Types of Unemployment

The two most commonly referred to theories on unemployment are the Keynesian and the Classical theories. Classical theorists suggest that full employment is the natural state of an economy, a status which employment will usually return to and remain at. As such, graphically, they would represent the AS curve vertically that depicts the same GDP at full employment on each price level. The Keynesian theory opposes this, as it claims that unemployment is the normal state of the economy and without governmental intervention, certain employment or output targets will not be reached. Due to this, a Keynesian theorist would represent the AS curve horizontally. Generally, all theories categorize unemployment into four types, which are structural, frictional, cyclical, and seasonal.

Marcelle worked full-time at an automobile manufacturing factory, but due to market contraction, many employees were let go. He cites that this is a nationwide issue due to drops in economic growth. As such, this can be seen as cyclical unemployment which is determined by declines in demand which leads to businesses being unable to offer more jobs. In the state of Florida, Marcelle would be eligible for unemployment due to the fact that he lost his job through no fault of his own (Florida Unemployment Guide). His eligibility would be further supported if he actively looked for work after being let go and had enough of the base wage to qualify for payments.

Dominic worked as a hair-dresser in Cinncinati before quitting and moving to New York. This can be seen as frictional unemployment, which is the most common type. Dominic is not eligible for unemployment as he had decided to leave his job himself (Florida Unemployment Guide). This type of unemployment is usually defined as the period of time between leaving one work and looking for another, or moving locations, as well as employees that have recently graduated.

Francine worked at a ski resort during the winter but the resort is closed during the summer. Francine does not want to work until the resort opens again in the winter season. This suggests seasonal unemployment, as Francine’s employment is determined by the demand of the industry during specific seasons or times of the year. This can be seen in other areas of work such as agriculture, where the winter is the inactive season. Francine is not eligible for unemployment as she is not actively looking for work until the winter season (Florida Unemployment Guide). However, she may have records of a base wage, and she did not decide to leave the employment herself, which makes her almost eligible for unemployment.

Beauvoir was a full-time secretary and was recently let go. This was due to the fact that the company he was working for was transitioning to computer utilization, which Beauvoir did not have a skillset or knowledge for. As such, his employer replaced him with someone who was more skilled in the equipment. Beauvoir is actively looking for other work but has also realized that without computer skills he may not be in demand as a secretary. This can be defined as structural unemployment, which occurs when current worker demographics and available jobs do not match. This often occurs due to technological advancements in certain industries. As Beauvoir’s previous workplace is using technology he was not trained to use, he is at a disadvantage in his field of work. However, as Beauvoir is actively looking for work and has records of a base wage, he may be able to be eligible for unemployment (Florida Unemployment Guide). It is not entirely clear if he became unemployed due to his own fault, as his lack of skills may be due to technological changes more than his own choice.

Reference

“Florida Unemployment Guide.” StateofFlorida.com, 2021. Web.