Question

The text outlines three kinds of unemployment: Frictional, Structural, and Cyclical. The Bureau of Labor Statistics describes a fourth kind, seasonal unemployment, as: “The seasonal fluctuations in the number of employed and unemployed people reflect not only the normal seasonal weather patterns that tend to be repeated year after year, but also the hiring (and layoff) patterns that accompany regular events such as the winter holiday season and the summer vacation season.” Of the four, structural unemployment is the most challenging for people.

In this discussion assignment, provide an example of each kind of unemployment you have either experienced or witnessed. Consider what you might personally do to avoid structural unemployment in your own career.

Answer 1

Frictional Unemployment

It is referred to as search and wait unemployment as the person is searching for the right type of job matching with his requirements in terms of salary, nature of work, location, qualifications etc. I witnessed when I graduated from my college. I did MBA in Finance and wanted a job in Finance Sector and I rejected many jobs related to Sales and Marketing as I wanted the job of my choice related to finance and accounts.

Structural Unemployment

Structural Unemployment occurs when the skillset possessed by an employee is no longer in demand by the employers. The most common example is in case of Data Analysts. These people will have to upgrade themselves by learning new skills like R, Python, SQL, VBA as these are in great demand in the market. They cannot depend upon Advance Excel only.

Cyclical Unemployment

Cyclical unemployment is the component of overall unemployment that results directly from cycles of economic upturn and downturn. At present due to Covid 19 many people are being laid off. Due to recession and downtrend in business people are loosing jobs. This is an example of Cyclical Unemployment.

Seasonal Unemployment

Seasonal unemployment occurs when people are unemployed at particular times of the year when demand for labour is lower than usual. I have witnessed this in my Father's Business. He manufacturers woolen garments like pullovers, jackets, etc and demand for these articles is mostly in winter. So, he faces seasonal Unemployment in summer season.

Out of all these Unemployment Structural Unemployment is the most adverse and can affect the economy for long term. Since technological progress keeps on going. Due to this old technology becomes obsolete and people with these skills also become Unemployed as they are no longer demanded in market.

I am working as a Financial and Data Analyst. I have started upgrading my skill set by learning new skills like VBA, R, Python, SAS, SQL etc. These skills are of immense importance to succeed as a Data Analyst. Previously I was dependent on Excel only but seeing market trends the use of Excel will become very little in the future industry. To avoid Structural Unemployment in future I have started upgrading my skillset.