What Is Natural Unemployment?

Natural unemployment refers to unemployment caused by some unavoidable reasons in the economy. In reality, the unemployment rate is 2% to 3%.

Natural unemployment

Right!

Natural unemployment refers to unemployment caused by some unavoidable reasons in the economy. In reality, 2% to 3%

Reasons for natural unemployment:

(1) Friction unemployment:

Frictional unemployment refers to the unemployment that occurs during the normal flow of labor. In a dynamic economy, changes in labor demand across industries, sectors and regions are frequent. Even in full employment, there will always be some turnovers as people look for work as they graduate from school or move to a new city. The amount of frictional unemployment depends on the amount of labor mobility and the time required to find a job. Since the flow of labor is normal in a dynamic economy, the existence of frictional unemployment is also normal.

(2) Structural unemployment:

Structural unemployment arises when labor supply and demand are inconsistent. Supply and demand are inconsistent because demand for one type of labor increases and demand for another decreases, while supply is not adjusted quickly. Therefore, when some sectors are growing relative to others, we often see imbalances in supply and demand across various occupations or regions. In this case, "unemployment and vacancies" often co-exist, that is, there are "vacancies" where people have no jobs and on the other hand, there are "unemployed people" who have no jobs. This is the structural feature of the labor market Caused by.

(3) Temporary or seasonal unemployment:

Temporary or seasonal unemployment is unemployment caused by the temporal or seasonal changes in production in certain industries. For example, the construction industry or the terminal loading and unloading, facilities failure due to bad weather or the hatch cannot be opened, etc., which makes the building construction have to stop, and the transportation loading and unloading often employ temporary workers. This type of unemployment is most common in agriculture, tourism, and construction. The timing or seasonality of production in these industries is determined by objective or natural conditions and is difficult to change. Therefore, this kind of unemployment is also normal.

(4) Technical unemployment:

Technical unemployment is unemployment caused by technological progress. In the course of economic growth, the inevitable trend of technological progress is that capital and technology-intensive technologies are more and more widely used in production, and more and more advanced equipment has replaced workers' labor. In this way, the relative reduction in labor demand will Increase unemployment. In addition, in the process of economic growth, the decline in the relative prices of capital goods and the relative rise in labor prices have also exacerbated the tendency of machines to replace workers, thereby increasing this unemployment. Those who fall into this category of unemployed are all workers with low cultural and technical level and unable to meet the requirements of modern technology.

(5) Job-seeking unemployment:

Job-seeking unemployment refers to unemployment caused by workers who are dissatisfied with their current job and leave to find a more ideal job. The existence of this kind of unemployment is mainly because of different labor markets. Even the exact same job has differences in wages and other conditions. Moreover, labor market information is insufficient. Not every worker can get complete job information. . The more information workers have on the labor market, the better they can find their ideal job. Joblessness during the period when a worker is looking for an ideal job is job-seeking unemployment. This unemployment is also the result of labor mobility, but it is different from frictional unemployment. Because this labor flow is not caused by the inevitable reasons in the economy, but by the workers themselves, which is of the nature of voluntary unemployment. Young people make up the largest proportion of this type of unemployed because young people are often dissatisfied with the status quo and eager to find a job that suits them better.