From ArticleWorld

Unemployment is the opposite of employment; it occurs when an individual is willing to work but is unable to find a paying job.

Related terminology

  • The unemployment rate is the number of unemployed workers divided by the total labor force. In practice, the measurement of this number is difficult.
  • Frictional unemployment refers to people who are looking for new jobs, although temporarily between them. It is used to differentiate people who are unemployed by choice from those who are actively seeking new employment.
  • Underemployment is used to describe someone who takes a job out of a need for the income but is working well below his or her skill or talent levels.
  • Cyclical unemployment is created when there is not enough demand for the labor.
  • Structural unemployment is caused by a change in industry or skill demands.
  • Technological unemployment occurs when workers are replaced with machines.
  • Classical unemployment is also called real-wage unemployment. It occurs when the real wage for a job is set above the market-clearing level.
  • Marxian unemployment, when it is needed to motivate employees to work while still keeping wages down.
  • Seasonal unemployment is when the specific industry is only in demand during certain times, particularly prevalent in resort communities.


Costs to society come in the form of increased poverty, political instability, crime, mental health issues and lowered quality of health. Often, the availability of health insurance in the United States is linked to employment status. Some people say that a reason for continued unemployment among some individuals is that welfare benefits, at times, offer more than a low-paying job. Unemployment also raises the power of an employer: more people are looking for more jobs, so the job market is more competitive. Many believe that a fear of the cost of job loss has a psychological anxiety that will weaken the effect of labor unions and decrease the members’ sense of solidarity.

In some cases, there are benefits to the entire economy. Unemployment keeps inflation from being high and a small amount of frictional unemployment will allow workers to find better suiting jobs.