Kinds of Unemployment essay

Kindsof Unemployment

Employmentrefers to a relationship between two parties, typically based on acontract where one party is an employee while the other is theemployer (Porket, 2009). Workers are paid for their services in anemployment contract. Nevertheless, employment regulations, laws, orlegal agreements govern employment (Porket, 2009). On another hand,unemployment refers to a condition when a person is activelysearching for employment cannot secure any work.

Part1: Unemployment types

Unemploymentis typically categorized into frictional, cyclical and structuralunemployment (Porket, 2009). Structured employment is usuallyassociated with jobs’ mismatch or workers’ mismatch as results oflack of skills or wrong desired area of work. Nevertheless, this kindof unemployment depends on economic dynamic changes and economicsocial needs (Porket, 2009). Similarly, frictional unemployment istypically present in any economy since it results from temporarytransitions made by employers or workers or due to incomplete orinsufficient information held by employers or employees. Lastly,cyclic unemployment is caused by expanding economic growth sincegrowing economy has a high level of unemployment (Porket, 2009).

Almostall types of unemployment are undesirable as the workers ends upwithout payment. However, structured unemployment may be termed asdesirable since it results in growing employment. Such is because theobject of any policymaker is to ensure economy grows. Furthermore,expanded economy will accommodate more workers.

Typically,frictional unemployment is primarily caused by economic transitionmade by employers or employees who have inconsistent or insufficientinformation (Porket, 2009). Advertising on the internet will ensureboth workers and employers have sufficient information. However, itmay not be possible for all employees to take the first job offeredto them due to necessary skills or wage issues (Porket, 2009). Thismeans it is entirely impossible to eliminate frictional unemploymentusing internet advertisements.

Part2: Explain when the following question will be correct.

‘Employmentwill decrease with increase of minimum wage especially for employeesearning less than new minimum wage.“

Theterm ‘labor demand’ and ‘employment’ interchangeably. In acase of high elasticity of labor, any increase in wage causes higherlabor demand, meaning elasticity is unitary and an identical changeoccurs (Porket, 2009). However, during lower elasticity than that,increase of minimum wage causes lower labor demand since employerswill hire lesser labors than before causing unemployment for thosewho had lower wages than present minimum wage.


Porket,J. L. (2009). Types of Unemployment In&nbspWork,Employment and Unemployment in the Soviet Union&nbsp(pp.17-40). Palgrave Macmillan UK.