One of the key macroeconomic goals is full employment.
As with all the other goals, this goal is also not just a number.
It's about ensuring our economy performs at its peak, providing income and fostering healthier social conditions for everyone.
Now, when we talk about full employment, it does not translate to the absence of all unemployment.
Instead, the focus is on reducing involuntary unemployment to the lowest possible level.
To get a clearer picture, let's delve into the various types of unemployment that can be distinguished.
Unemployment isn't a one size fits all term.
It has several categories each with its unique reasons and effects.
Take frictional unemployment, for instance.
This is what happens when individuals are in transition between jobs or stepping into the job market for the first time.
This type of unemployment is quite natural in a dynamic economy as it reflects people's freedom to seek new opportunities, move cities or freshly enter the workforce.
Then there's structural unemployment, which arises from a disconnect between the skills workers possess and what employers currently need.
This could stem from technological advancements, shifts in consumer preferences, or other economic changes that alter the landscape of job opportunities.
Cyclical unemployment, on the other hand, ebbs and flows with the economy's rhythm, in times of economic downturns.
As the demand for goods and services falls, jobs are shed.
Conversely, when the economy bounces back, this type of unemployment typically diminishes.
And let's not overlook seasonal unemployment found in sectors like agriculture, tourism, and retail, where the demand for labor is not consistent year round, leading to periods of unemployment.
In terms of achieving full employment, frictional unemployment isn't just inevitable.
It's a sign of a healthy job market where there's a steady stream of movement and growth.
Other unemployment types, however, often point to deeper economic issues that require strategic policy interventions to rectify.
