Why are you unemployed？

by Zeyang W.

In January, the US unemployment rate is below 5%，is the lowest point since 2008 economic crisis. It is good news. At the same time, we also should think about it, why do people unemployed?

There are two main parts: voluntary unemployment and involuntary unemployment

Voluntary unemployment is a situation when a person is unemployed because of not being able to find employment of his/her own choice. Voluntary unemployment is refers to the real wages of workers required to exceed its marginal productivity, or unwilling to accept the current working conditions was not employment and income level of unemployment. Because the unemployment is due to subjective reluctant to labor force employment, it cannot be eliminated by economic instruments and policies.

Involuntary unemployment occurs when a person is willing to work at the prevailing wage yet is unemployed. There are also several reasons: Structural unemployment, cyclical unemployment and Technical unemployment.

Structural unemployment refers to the labor supply and demand mismatch caused by unemployment, its characteristics is both unemployment and vacancies and unemployed or not the right skills, or place of residence, improper, and therefore cannot fill the existing vacancies. Structural unemployment is a long term in nature, and is usually derived from the demand side of the labor force. This unemployment is caused by economic changes, which lead to a relatively low demand for specific types of labor in a particular market and region.

Cyclical unemployment refers to the economic cycle fluctuations caused by unemployment, namely economic cycle of recession or depression, due to a drop in demand caused by unemployment, when the reduction of aggregate demand in the economy, reducing the total output, will cause the entire economic system of widespread unemployment. Unemployment is resulting from a decline in the aggregate demand of society during the recession or depression in the economic cycle. When the economic development is in a period of recession, the total demand of the society is insufficient, so the scale of production is also reduced, which leads to the more common phenomenon of unemployment.

Technical unemployment: In the production process, the introduction of advanced technology to replace labor, as well as to improve the production methods and management of unemployment. From two points of view, from a long-term perspective, the total level of labor supply and demand is not affected by technological progress; in the short term, advanced technology, productivity and improves the business management. As well as the improvement of productivity, it is bound to replace some of the labor force, so that some people are unemployed.

resources:
chizhenwei."unemployment".biadubaike. May,2015.Web.Feb, 2016.