8 Types of Unemployment in Indonesia

Types of unemployment – ​​It is better to be tired of working than tired of looking for work. Has Sinaumed’s ever heard this phrase uttered by someone? Yes, that’s how it is, Sinaumed’s. Work or not work equally tired. Moreover, being unemployed, fatigue can be many times over. On this occasion, we will review the types of unemployment. Come on, Sinaumed’s. We just cus.

Definition of Unemployment

This word sounds painful because there is hope that has not been achieved. Who can be called unemployed? Are those who do not work at all, work less than two days a week, are looking for work, or someone who is trying to get himself a decent job.

In a more specific definition, the unemployed are those who do not work at all or are looking for work while they are in the labor force range (age 15-65 years). Why is there unemployment? This is because the number of labor force is not commensurate with the number of available jobs.

In August 2021, it is known that the number of unemployed people in Indonesia has reached 9.1 million people. This number has improved because 670,000 people managed to find work compared to the previous year, August 2020, which reached 9.77 million people.

Types of Unemployment

The existence of unemployment does not mean that it is created for the same reason. We need to know, unemployment is caused by many reasons. Therefore unemployment is divided into several types, namely:

1. Cyclical Unemployment

When economic conditions deteriorate, demand for goods and services from consumers decreases, so the quantity of production decreases. This resulted in a decrease in the number of workers needed. In such circumstances, the company sees no other choice but to reduce the workforce.

The decision should be made with careful calculations. Because if the company continues to pay high costs for employee salaries, while the income is small, the company risks experiencing losses.

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This cycle can be dampened by government intervention. An example of government intervention that can help revive the economy is through expansionary monetary policy and fiscal policy.

2. Frictional Unemployment

People who have been laid off because the company is losing money and are looking for a new job can also be included in this category of unemployed. In essence, this type of unemployment is temporary.

The phenomenon of frictional unemployment is commonplace, even though a country’s economic condition is stable. There is no need to worry about this because frictional unemployment is a natural part of the job search process.

3. Seasonal Unemployment

Seasonal unemployment occurs in many seasonal fields. For example workers harvesting rice or plantation products, fishermen catching seasonal fish, tourism or construction.

4. Structural Unemployment

These conditions often create changes in the economic structure. These changes eventually lead to the emergence of the need for new skills that did not exist before. Because of this, not a few people fail to get a job because their skills are limited and they don’t keep up with the times.

An example of a situation that creates structural unemployment is a company that starts using robots so that the production process can be carried out automatically. Save operational costs, save time, and of course be more productive.

The existence of this robot makes the role of employees no longer needed. Maybe only a few people who can control the robot. Therefore, you are required to always upgrade yourself  so that you can compete with other workers.

This type of unemployment can also be caused by a long economic recession. The long recession resulted in many workers being out of work for a long time. Skills that are not sharpened result in reduced ability of a person. As a result, his skills decreased.

Types of Unemployment

5. Long Term Unemployment

In other words, long-term unemployment can be caused by a recession or reduction of employees. Or it could also be due to a mismatch between the skills of workers and the needs of the company.

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6. Underemployment

It is said to be underemployed because actually, these people do not fall into the category of unemployed. But they only provide very little results for the company. Even if their position is abolished, there will be no impact on the company’s performance. Even if there is influence, the portion is very small.

This type of unemployment occurs because the number of workers is too much, exceeding  the job descriptions  in the company. In addition, the low ability of human resources or workers compared to company needs makes them unable to do many things.

7. Casual Unemployment

Casual unemployment is mostly found in companies that operate seasonally, such as tourism, construction, and agriculture. Not only that, several manufacturing companies that employ their employees on a contractual basis also have the potential to give birth to casual unemployment.

8. Classic Unemployment

This can happen because there is a strong demand from labor unions for a salary increase above the nominal salary in general. In addition, classic unemployment is also caused by government policies that set higher minimum wages. And the last reason, the wages specified in the long-term contracts exceed the equilibrium point due to the recession so inevitably the company laying off some workers can maintain the wages agreed in the contract.

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  • Sinaumed’s, there are eight types of unemployment that we have talked about. Don’t forget, when talking about books and science, always remember sinaumedia. Because #FriendsWithoutLimits know no boundaries.

Author: Nanda Iriawan Ramadhan