Frictional Unemployment

With the high unemployment rate these days and the bad economy people aren’t hiring, but one thing many people might not realize and that’s that there are different TYPES of unemployment. Interestingly, even during good times, there is something called frictional unemployment.

Different from the big picture assumption that unemployment is a result of lay-offs, budget cuts, and a bad economy,  frictional unemployment is pretty much VOLUNTARY on the employee’s part and almost circumstantial, as it occurs when there is a job aligned for the individual’s skills, it just can’t be filled for the time being due to clerical issues, background checks and screening processes, relocation issues and more.

Yet, studies have shown that during times of economic downturns and recession, the number of people experiencing “frictional unemployment” drops drastically, as individuals begin to fear making any career moves. When the economy goes south, generally the number of available jobs decreases, which means there are a limited number of alternative opportunities for employees to pursue. Everyone seems to revert into survival mode and clings to anything that won’t rock the boat. Fewer people change jobs so the “friction” during the interim period is lower. [Read more…] about What is Frictional Unemployment?