Unemployment is, generally, subdivided into frictional unemployment, the inevitable temporary unemployment of those moving from one job to another; cyclical unemployment, caused by a downswing in the business cycle; seasonal unemployment, in an area where there is high demand only during holiday periods, for example; and structural unemployment, where changing technology or other long-term change in the economy results in large numbers without work.

Many countries in the developing world suffer from severe unemployment and underemployment; the problem is made worse by rapid growth of population and lack of skills. In industrialized countries, the rise in world oil prices in the mid-1970s caused a downturn in economic activity, and greater use of high technology has improved output without the need for more jobs. There continues to be a great deal of youth unemployment despite government training and job creation schemes. In the USA the official unemployment rate was 5.1% in 1996 (6.8 million), but it is estimated that 20% to 25% of those who want employment cannot find any (and have never had a job or are out of work longer than unemployment compensation is paid, so are not counted by labour statisticians). In China, nearly a quarter of the urban labour force is unemployed.

In Britain, for at least 150 years before 1939, the supply of labour always exceeded demand except in wartime, and economic crises accompanied by mass unemployment were recurrent from 1785. The percentage of unemployed in trade unions averaged 6% 1883-1913 and 14.2% (of those covered by the old Unemployment Insurance Acts) 1921-38. World War II and the rebuilding and expansion that followed meant shortage of labour rather than unemployment in the Western world, and in Britain in the 1950s the unemployment rate fell to 1.5%. Fluctuation in employment returned in the 1960s, and in the recession of the mid-1970s to 1980s was a worldwide problem. In Britain deflationary economic measures tended to exacerbate the trend, and in the mid-1980s the rate had risen to 14% (although the basis on which it is calculated has in recent years been changed several times and many commentators argue that the real rate is higher). Since September 1988 it has been measured as the total or percentage of the working population unemployed and claiming benefit. This only includes people aged 18 or over, since the under-18s are assumed to be in full-time education or training, which is not always the case. As the British economy experienced significant economic growth between 1986 and 1989, the rate of unemployment fell to a low of 5.6% in April 1990 (using the post-1988 definition) but rose again during the subsequent recession, reaching a peak of 10.5% in April 1993. As the economy recovered, it fell once again, to 9.5% in April 1994, and to 8.7% in 1995. The average number of unemployed people in 1995 was 2.3 million.

Most present-day governments attempt to prevent some or all of the various forms of unemployment. The ideas of economist John Maynard Keynes influenced British government unemployment policies during the 1950s and 1960s. The existence of a clear link between unemployment and inflation (that high unemployment can be dealt with by governments only at the cost of higher inflation) is now disputed.

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unemployment rates: lowest and highest

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Towards a Better Future - The Works of Manfred Davidmann

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Zwelitsha, Eastern Cape, South Africa