The Different Types of Unemployment and Why I Added a New One

Remember that viral headline that said that 40% of Americans were thinking about quitting or changing their jobs? Today, the Labor Department said job openings rose at the end of May by 16,000, pushing the total to a new high of 9.2 million jobs in records dating back to 2000.

Based on those numbers, it appears what has been dubbed The Great Resignation is still in play. 

But why? 

The pandemic is the patsy. It was a time of reflection. That is what this period of our lives should be called: The Great Reflection. And because of it we a did pros and cons list and decided to go with the con. 

We are a working society. It’s in our nature. If we want to maintain our current lifestyle then we know we have to tough it out regardless of the work itself. But not 40% of Americans. They chose to roll the dice. They double-downed on unemployment. 

Types of Unemployment

Per the economist, there are two types of unemployment: voluntary and involuntary. People in the former group do not seek out employment and the ones in the latter group seek it out but are unable to find work. 

The media reports on the involuntary unemployment numbers and the stock market responds to it. Economists divide involuntary unemployment into four categories: 

Cyclical Unemployment

Is an external economic factor. It is the main cause of high unemployment. The aftermath of the 2008 housing crisis is an example of this. During that period, people were getting laid off due to a business downturn. 

Frictional Unemployment

This is when a person is between jobs in a healthy economy. An example would be someone returning to the workforce after a temporary leave of absence or a recent college grad looking for their first job. 

Seasonal Unemployment

Deals with demand due to the nature of doing business. For example, Macy’s and UPS hire temporary workers during the holiday season. 

Structural Unemployment

There are jobs available but some workers do not have the skillset to perform the required tasks. Advancement in technology is usually the culprit. 

That wraps up the types of unemployment in layman terms. I believe that not only should we discuss those four above mentioned but we need to look deeper into the current 40% movement.

A New Type of Unemployment…Sort of

Right now, people are willing to quit their jobs without taking into consideration how it affects them financially. Americans have less than $400 in savings for an emergency but yet people still want to quit. Why? 

I believe it is due to the current tone of the organization. Have you ever heard of the phrase, “Tone at the Top”? They use it to define management. It’s the company’s culture. It’s core values. People have had time to reflect on their company’s tone and question if they still fit into that mold. 

This in my opinion should be a new type of unemployment: tonal unemployment. It represents people who want to be employed but are no longer satisfied with how the company presents itself. How the company values them as a person. 

Companies need to be cognizant of this type of unemployment. If not, they will not prosper. They need to adjust their tone before it repels the employee. For them to feel as though the sacrifice is worth the reward of a bi-weekly paycheck. 

After reading that 40% headline, I wondered how many people thought about quitting their job. I’m sure it was brief. A flash second. For me, I saw a vision of my older self saying, “Excuse, me”. That was enough for me to shake off that feeling.  

Questions to Consider

What about you? Did you consider it? If yes, ask yourself the following questions:

• What would my current situation look like if I quit my job? 
• What would my future look like if I had quit my job?
• What would my current situation look like if I don’t quit my job? 
• What would my future look like if I don’t quit my job? 

I know it is a lot to contemplate. But when we are thinking about a life-changing event, we need to take the time to provide answers to such questions.  

Now ask yourself this:

• What would my financial situation look like if I quit my job?
• What would my future look like if I am unable to find another job within six months or a year? 

I asked those questions to someone who wanted to join the 40% movement. She was willing to use up her savings and money she saved for her retirement to join the ranks of what I deemed tonal unemployment. What was her plan? She didn’t have one.

The bottom line… 

I would love to be part of the 40% movement but when reality sinks in, it doesn’t work for me right now. Why? I remind myself each day that my younger self prepares my older self for whatever awaits me in the future. Right now, I must make sound decisions for that person.