Global Journal of Human Social Science, E: Economics, Volume 21 Issue 4

their skills or possess the skills employers are not looking for to engage. Structural unemployment is in two perspectives. One, when some labour markets have more workers than there are jobs available, and for some reason, wages do not decrease to bring the market into equilibrium. The second aspect is when workers possess skills that are not in high demand in a particular marketplace. Hence, there is a mismatch between workers’ skills and employer's needs. iv. Cyclical Unemployment: This occurs due to fluctuations around the natural employment rate due to aggregate demand changes. This situation occurs when there is an inadequate level of aggregate demand. In every market economy, producers produce goods in anticipation of request, but when aggregate demand in any economy is deficient, unemployment will arise because factory workers will be disengaged, which may lead to depression; and according to Keynes, the great depression of the 1930s was of deficient aggregate demand. It heightens that unemployment is higher during recessions and depressions while lower periods of high economic growth. Economist has coined the term cyclical unemployment to describe the unemployment associated with the economy's business cycle. During the recession, demand for goods and services in an economy falls. A resultant effect is that some companies respond by cutting down production, and workers are laid off rather than reducing wages and prices of goods and services. However, when the economy recovers from recession or depression, cyclical unemployment tended to disappear. v. Natural Unemployment: Every economy always has some level of natural unemployment, even in a healthy economy. The lowest number of unemployment was at 2.5%, right after the Korean War, as in an economic bubble that soon leads to a recession. That is why some natural unemployment level is usually around 4%, which is a healthy indicator. vi. Real Wage (Classical) Unemployment: This is a form of dis-equilibrium unemployment that occurs when real wages for jobs are forced above the market cleaning level. Trade unions and wage councils are traditional institutions causing this type of unemployment. However, in recent years, the importance of trade unions in the UK labour market has dwindled, and this has not stopped unemployment from reaching nearly three million in the last twenty years or so. Real wage or Classical unemployment results from real wages being above their market-clearing level leading to an excess supply of labour. Some economists believe that introducing a national minimum wage will positively create some classical unemployment in industries when average wage rates are closer to the NMW level and international competition from low labour cost producers is severe. vii. Hidden Unemployment: There is always hidden unemployment as some people interested in doing paid work are not counted as workers for obvious reasons and are not classified as unemployed. An employee leaving a job for a long time, losing motivation to apply for jobs, and not having the requisite skills may also be an influencing factor for hidden unemployment. The poverty trap may cause jobless workers not to apply for work because of financial incentives created by the income tax and state benefits system's interaction. viii. Voluntary Unemployment: This deliberate unemployment occurs when a person refuses to take any paid employment, deciding not to work. A good example is when husbands order their wives not to do any work but stay home as full-time housewives. ix. Under-Employment: This is a situation whereby the potentialities of a worker were not utilised fully. There is financial, mental, and physical underemployment. When the worker is not getting equal pay from the work he is doing; mental when there is a discrepancy between the work a person does compare to and what he studied; vis-a-vis physical when the worker is underutilised. x. Technological Unemployment: This is unemployment resulting from switching from labour- intensive production technique to capital intensive production technique. In this situation, where the machine takes over men's work, the men are rendered jobless because they replace men in the production process. The skilled workers are retained, while the unskilled are replaced with machines. xi. Residual Unemployment: is a type of unemployment faced by people who are so low in a standard of efficiency that few occupations may be open to them; meaning that a segment of the labour force cannot contribute substantially to the economy due to physical disability and such labour includes the physically disabled persons or the handicaps. xii. Search Unemployment is the situation in which when a person turns down offers to work on the premise of searching for a better paid work, which search may last for a long time depending on the prevailing economic situation in the country. xiii. Deficient Demand Unemployment: This occurs where there is not enough aggregate demand to produce work for the whole labour force, no matter how it is trained. Volume XXI Issue IV Version I 60 ( E ) Global Journal of Human Social Science - Year 2021 © 2021 Global Journals Which of these Economics Jargons - Underemployment, Overemployment, Unemployment, Rightemployment, Overqualification and Overeducation is Appropriate for an Economy?