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What is Unemployment?

By R. Kayne
Updated May 16, 2024
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Unemployment refers to the inability for willing workers to find gainful employment. The degree of unemployment in a nation is one indicator of the economic health of the country. Many factors can negatively affect this rate, including corporate downsizing, mergers, implementation of automation technologies, and job outsourcing to other nations. Some argue illegal immigration affects the ability of people to find jobs as well, though critics of this viewpoint counter that jobs held by illegals are generally low paying or undesirable.

In the United States, workers pay into unemployment insurance through a deduction or tax that comes out of every check. Benefits can then be paid to the unemployed person for a period of time to help with bills, food, and other expenses. During this time, an advisor meets with the candidate and supplies him or her with job leads. The candidate is also expected to make personal efforts to find work, such as checking the daily newspaper or looking at online employment hubs.

There are many options today for workers that likely help to curb unemployment rates. The Internet provides a rich landscape for job recruiting. These websites not only serve companies looking to hire by listing employment opportunities, many of them also allow those looking for work to enter an online resume and biography.

In some cases, when gainful employment can’t be found, a person will turn to temporary agencies until a permanent position is found. Companies will often contact temporary agencies when they need someone to fill in for an employee who has taken a leave of absence, or if they have backlogged work or special projects. It’s not uncommon that a person sent on a temporary assignment ends up being permanently hired.

When unemployment is high, mid-level jobs are the most difficult to find, while minimum-wage jobs are always plentiful but are not profitable and are therefore not considered gainful employment for the majority of the work force. Highly skilled professionals, particularly in medicine and technology, are generally in demand and can often find work through personal networking or by using a headhunter.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

Discussion Comments

By anon279884 — On Jul 14, 2012

I worked for a company for 11 years, and due to to company turn over I was demoted to a position that I was not happy with. After I was still employed I was hired on with another company. I have been working with the new company for five and half months, but I have been unable to meet the requirements and have been given one verbal and one written warning that my job performance did not meet their requirements.

I know that soon they will fire me and I have been seeking employment elsewhere before the day comes when they let me go. I would like to know if, in the event that I am let go before I find other employment, will I be able to get unemployment until I find employment?

By anon88512 — On Jun 05, 2010

I stated receiving unemployment benefits from a previous job, stated working for another company after four months and have passed my probation time they lay me off. will I continue receiving my unemployment benefits? Will the amount will go higher? What happens if one comes disabled while receiving unemployment benefits?

By anon29513 — On Apr 03, 2009

If an employee is offered to continue working with reduced number of hours and he refuses to take it, is it a lay off, employee quitting or company firing an employee, in the state of Texas?

By melmanstlfan — On Jan 05, 2009

Please help me out on these two items: What is the definition of "gainful employment"? What is the definition of "marginal employment"? I need to know this because a person going into disability retirement was considered "gainfully employed" because he continued to use "Sick Leave" and got paid for the sick leave he accrued over 29 years of service. Can this in reality be "gainful employment" or "marginal employment"? This can determine a retirement date by approximately 9 months. So, please, tell me what you think.

By papua — On Jul 23, 2008

My name is JOE, I'm a student and currently I'm conducting research om why bachelors degree graduates in Indonesia cannot easily find jobs. I would like you to help me answer the following questions:

1. Do you think bachelor graduates in Indonesia could easily find job?

2. Which major of bachelor degree do you think is most likely to find job easily Political studies, Education, Economic studies, Law studies, Agricultural studies, Others?

3. Which of the following factors do you think is most likely to influence the bachelor graduates in finding a job in Indonesia? Work experience, Job demand, Family connection, others?

By shaylag — On Jun 28, 2008

In regards to unemployment benefits, how do automatic stabilizers alter taxes and transfer payment within business cycles?

By bananas — On Jun 10, 2008

Casually, people will use the word "unemployment" to refer to the unemployment compensation that they receive from the government. So, for example, someone might say, "I can't spend that much on dinner because I'm on unemployment."

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