8 Types of Unemployment in Indonesia

8 Types of Unemployment in Indonesia

Nikereact.orgIt’s better to be tired of working than tired of looking for work. Have you ever heard say that phrase by someone? Yes, that’s how it is,. Work or not work together tired. Moreover, being unemployed, tired can be many times. On this occasion, we will review the types of unemployment. Come on, Grams. We’ll just go straight to it.

Definition of Unemployment

8 Types of Unemployment in Indonesia

This word sounds painful because of the unfulfilled expectations. 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, unemployment is 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 in Indonesia will reach 9.1 million people. This number includes an improvement 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 created for the same reason. We need to know, unemployment is caused by many reasons. Therefore, unemployment is divided into several types, namely:

1. Cyclic Unemployment

Cyclical unemployment is unemployment that is affected by sluggish business cycle activity or erratic economic fluctuations such as a recession. Unemployed people of this type are people who are affected by the reduction of labor.

When economic conditions deteriorate, the demand for goods and services from consumers decreases, so the quantity of production decreases. This results 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 calculation. Because if the company continues to pay high costs for employee salaries, while the income is small, the company is at risk of experiencing losses.

This cycle can be tamed with government intervention. Examples of government intervention that can help economic revival are through expansionary monetary policy and fiscal policy.

2. Frictional Unemployment

Frictional unemployment usually occurs because a person’s career life is in a temporary transition period. For example, someone who left his old job and has not found a new job. This also applies to students or students who have just graduated but are looking for work.

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

The phenomenon of frictional unemployment is common, even though the economic condition of a country is stable. This is nothing to worry about because frictional unemployment is a natural part of the job search process.

3. Seasonal Unemployment

There are some jobs that can only be done at certain times. Unfortunately, the work cannot be done throughout the season, even if it is forced. As a result, there are times when workers in these fields are unemployed. They are called seasonal unemployment.

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

4. Structural Unemployment

This type of unemployment often occurs because of a mismatch between the needs of the company and the capabilities of the workers. Globalization and industrialization are the two most common causes of this type of unemployment.

These conditions often create changes in the structure of the economy. These changes eventually led to the emergence of the need for new skills that did not exist before. Because of that, 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 gives rise to structural unemployment is a company that has started using robots so that the production process can be done automatically. Save operational costs, save time, and of course more productive.

The existence of this robot makes the role of employees no longer needed. Maybe only a few people 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 losing their jobs for a long time. Skills that are not honed result in a decrease in one’s abilities. As a result, his skills decreased.

Types of Unemployment

5. Long-Term Unemployment

Long-term unemployment is assigned to someone who has not worked for 27 weeks or more. The reason for this long-term unemployment is usually due to two things. First, because of cyclical unemployment. Second, because of structural unemployment.

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

6. Underemployment

In English, this type of unemployment is called disguised unemployment. In essence, people who fall into this category do work. However, their work productivity is low.

It is said to be disguised unemployment because in fact, these people do not fall into the category of unemployment. Yet they provide very little return for the company. Even if their position is abolished, there will be no effect 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 large, exceeding the job description in the company. In addition, the low ability of human resources or workers compared to the company’s needs makes them unable to do many things.

7. Casual Unemployment

When a worker stops working because their employment contract expires, that’s when he can be said to be casually unemployed. In general, this type of unemployment occurs in casual daily workers or contract workers so that they have to leave their jobs after the employment contract has ended.

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

8. Classic Unemployment

This last type of unemployment occurs because the wages given to workers are higher than the contributions made by the workforce. In general, companies are required to pay more to each employee, so the company must lay off some other employees so that they can pay the previous employee.

This could be due to a strong demand from the union for a salary increase above the nominal salary in general. In addition, classic unemployment is also caused by government policies that set a higher minimum wage. And the last reason, the wages specified in the long-term contract exceeds the equilibrium point due to the recession so that the company inevitably lays off some workers to maintain the wages agreed in the contract.

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