Difference Between Seasonal And Disguised Unemployment

Seasonal unemployment results in a lack of employment opportunities during specific periods, while disguised unemployment happens when more individuals are employed than is necessary. This is the primary distinction between disguised unemployment and seasonal unemployment.

Difference Between Seasonal And Disguised Unemployment

What Is Unemployment?

A person who actively seeks employment but is unsuccessful in doing so is said to be unemployed. The unemployment rate is an important indicator of the state of the economy and the most commonly utilized metric for assessing unemployment. It is computed by taking the total number of jobless individuals and dividing it by the total number of workers.

Difference Between Seasonal And Disguised Unemployment

Understanding Unemployment

Since employment indicates whether or not workers can find gainful employment and contribute to the economy's productive output, unemployment is an important economic statistic. There will be less overall economic production if there are more unemployed workers.

Those who quit the workforce for retirement, further education, or disability are not included in the definition of unemployed.

Seasonal Unemployment

Seasonal unemployment is the term used to describe the fluctuations in employment levels in some industries or occupations, such as construction, farming, and tourism, that are impacted by seasonal shifts. There is typically a high demand for labor in these businesses at specific seasons of the year and a low demand during others. Therefore, during the off-season, employees in these businesses could go through spells of unemployment.

Difference Between Seasonal And Disguised Unemployment

The Advantages of Seasonal Unemployment

  • Lower labor expenses for companies during slack times.
  • Allows employees to be flexible and take time off or look for other alternatives when business is slow.
  • Less demand is placed on government assistance programs when business is slow.
  • Increased expenditure by consumers during busy times.
  • Decreased production during slow times results in a smaller environmental effect.
  • Lower fatigue among employees leads to higher productivity and job satisfaction.
  • Promotes professional growth and workforce mobility.
  • It can lessen waste and aid in preventing overproduction.

Disadvantages of Seasonal Unemployment

  • Workers can suffer from loss of revenue and job security.
  • Workers find it challenging to preserve money during lean times and plan for future expenses.
  • Increased demand during quiet times for government assistance programs.
  • Enterprises' challenges in keeping a steady staff.
  • Decreased output and job satisfaction among employees as a result of instability and uncertainty.
  • This can result in significant employee turnover and expensive hiring for companies.
  • This can result in a mismatch between the needs of the company and the skills of the workforce.
  • This can lead to economic inequality and poverty in places where seasonal industries play a major role.

How Does Seasonal Unemployment Work?

The method by which seasonal unemployment works is by making sure that, at any given time of year, the quantity of jobs available matches the need for workers within a business. This implies that during some seasons, a business may require more workers than during others, which could lead to seasonal unemployment when the more profitable season concludes. Those who hold jobs that are directly related to a particular season or event are let go during a period of seasonal unemployment and must look for other employment alternatives.

Some people choose to switch to a new seasonal job every time the season changes in an attempt to continue working during the seasonal slowdown and secure employment again as soon as possible.

Examples Of Seasonal Unemployment

Consider these examples of seasonal unemployment:

1. Agriculture Example

During the summer, while Jared is home from college, he works for a local farmer. Watering the fields, cleaning and gathering crops, and getting ready to carry orders to the farmer's market are all part of his job. Until the final week of August, Jared is also in charge of the farmer's market booth. Jared anticipates being unemployed for a while after the summer since the farm only produces crops that flourish in the summer.

Jared may get ready to start looking for new employment closer to his college in the first week of September because he knows that the farmer's market finishes during the last week of August.

2. Holiday Example

As a professional actress, Lucia gets hired to perform over the holidays at a place named Winter Wonderland. As part of her duties, she must develop a character with a holiday-related past, talk with visitors while strolling through the park, and take pictures and films of those who want them. Lucia learned during her job interview that the Winter Wonderland attraction is typically open from the last week of November through the first week of January.

Lucia starts looking for her next acting project in December in anticipation of her first week of unemployment once Winter Wonderland ends, which is known as seasonal unemployment.

3. Theme Park Example

Wanda spends her summers working at Thrill City, a theme park with roller coasters, carnival attractions, a range of dining options, and character interactions with live entertainers. One of the park's water rides is Wanda's roller coaster, which propels riders over water rapids to cool off during the hot summer months.

Conversely, Thrill City closes its water rides in the last week of August and closes the park during the last week of October.

Wanda can find a new job at Thrill City after her ride closes in August, but she may experience seasonal unemployment when the park closes in October. In order to prepare for the day when her seasonal job ends and she may resume working, Wanda can start looking for new employment in October.

Difference Between Seasonal And Disguised Unemployment

Causes of Seasonal Unemployment

1. Lack of Demand

There is a peak season for seasonal work when a greater labor force is required. In many industries, this is the time of greatest demand and earning potential. As a result, workers who are laid off in the off-season have to find new work.

2. Seasonality in Particular Industries

Seasonal changes can result in unemployment. Certain seasons of the year are when many goods are most in demand. Manufacturers of umbrellas, for instance, need to find another source of income once the rainy season ends. Due to this, seasonal unemployment also affects farmers and holiday-related businesses like firecrackers and Christmas tree vendors.

3. Lack of Multiple Cropping

Different crops are grown by farmers at different seasons of the year. A farmer can use his property to produce and make money all year long if he wants to undertake multiple cropping. On the other hand, managing a single crop may result in temporary joblessness.

4. Insufficient Cottage Industries

Crafts such as ceramics, candles, weaving, soap, and so forth are in demand year-round and draw in rural residents. Because there are few other sources of income in rural areas, the absence of cottage industries may cause contractual farmers and their families to experience seasonal unemployment.

5. Agriculture Is Not Commercialized

Even with a seasonal crop, commercialization of agriculture enables a farmer to earn from his harvest all year long. When the season ends, he still doesn't have a job without it.

Difference Between Seasonal And Disguised Unemployment

Disguised Unemployment

The term "disguised unemployment" describes an economic situation in which there is a labor surplus, but not all of the workers are fully employed. This may happen if workers are unable to find positions that utilize their skills or if the economy needs to receive the investments necessary to generate new jobs. A decline in productivity and a drop in the standard of life for those who are unemployed or underemployed might result from disguised unemployment.

Difference Between Seasonal And Disguised Unemployment

Understanding Disguised Unemployment

Covert unemployment is common in developed nations with sizable labor force surpluses caused by their huge populations. It can be identified by its low productivity and tendency to follow agricultural and informal labor markets, which have high labor demand.

Any fraction of the unemployed population at maximal potential might be concealed or secret unemployment. Still, official unemployment statistics frequently do not include it in the national economy. This can include people who work well below their capabilities, people whose jobs contribute little to total output, or any group that isn't looking for work right now but is capable of producing valuable work.

Advantages of Disguised Unemployment

  1. Lower Labor Costs: Workers who are ready to accept lower compensation because there aren't many other employment options may be the result of disguised unemployment.
  2. Productivity Gains: When there is a labor shortage, employees may be more driven to put in more effort in order to maintain their positions, which can result in higher productivity.
  3. Greater Working Conditions: When there are fewer applicants for positions, companies could be more inclined to give their staff members greater perks and working conditions.
  4. Lower Inflation: Since there is a labor surplus that keeps prices and wages low, disguised unemployment can help to lower inflation.
  5. Better Social Welfare: In the event of disguised unemployment, the government can reallocate excess labor to other economic sectors, improving the general well-being of the population.
  6. Decreased Crime Rate: People who are employed are less likely to commit crimes, which can contribute to a decrease in crime.
  7. Better Living Standards: People who are employed typically have higher living standards since they can afford to buy products and services and have a regular source of income.
  8. Increased Economic Growth: Since excess labor may be used to boost output and productivity, disguised unemployment can aid in the expansion of the economy.
Difference Between Seasonal And Disguised Unemployment

Disadvantages Of Disguised Unemployment

  1. Diminished Economic Growth: Since disguised unemployment wastes human resources and potential revenue, it can contribute to a decline in economic growth.
  2. Increased Poverty: Workers who experience covert unemployment may find themselves unable to pay for their essential requirements, which might result in a rise in poverty.
  3. Increased Crime Rate: Individuals without jobs may be more inclined to commit crimes, which may contribute to increased crime rates.
  4. Lower Living Standards: Those without a job typically have lower living standards since they do not have a steady source of income and may not be able to pay for necessities.
  5. Working Conditions could be better because businesses may not be motivated to improve them when there is a labor surplus, which is a result of disguised unemployment.
  6. Declined Social Welfare: The government might not have the means to reallocate the excess labor to other economic sectors, which is one reason why disguised unemployment can result in a decline in social welfare.
  7. Increased Inflation: When there's a shortage of labor, disguised unemployment can cause prices and wages to rise.
  8. Diminished Investment: Since it implies a lack of demand for goods and services in the economy, disguised unemployment may deter investment.

Causes Of Disguised Unemployment:

  1. Underemployment: If someone wants to attain and is capable of working a full-time job, they may be eligible for disguised unemployment under specific circumstances if they work part-time. It also covers people who take on tasks much beyond their area of expertise. In such cases, "underemployment," which includes those who work to some extent but not to their full potential, is another term for hidden unemployment.
  2. Illness and Incapacity: The sick or partially disabled can also be included in this category. They might be effective in the economy even if they don't operate actively. This kind of transitory, disguised unemployment in the context of a handicap is recognized while an individual is looking for assistance. This indicates that the person is frequently excluded from a country's unemployment data.
  3. No Longer Seeking Employment: For the purposes of calculating the unemployment rate, a person who stops looking for work, regardless of the reason, is frequently no longer counted as unemployed. To be considered unemployed, a person must actively seek employment in many countries.
Difference Between Seasonal And Disguised Unemployment

Examples Of Disguised Unemployment

  • Unemployment is disguised in states and urban areas. A few experts working as painters, electricians, and plumbers were identified. These types work less efficiently in part because they are still regularly looking for employment.
  • Where the primary source of income in rural cities is agriculture, lands that only need three or four workers to work on them frequently cause this type of underemployment. In any unforeseen circumstance, just two more people are needed.

Similarities Between Seasonal Unemployment and Disguised Unemployment

  • An excess of labor is present in both forms of unemployment.
  • Both might happen in particular fields or geographical areas.
  • Variations in the demand for products or services may be the source of both.
  • Both may lead to underemployment and a shortage of employment prospects.
  • Both may result in slower economic expansion.
  • Both have the potential to worsen social problems and poverty.
  • Programs and policies of the government can address both.
  • Programs for education and work training can enhance both.
  • By making development and infrastructure investments, both can be decreased.
  • Both may have detrimental long-term repercussions on the impacted people and communities.

Differences Between Seasonal And Disguised Unemployment

Seasonal UnemploymentDisguised Unemployment
It occurs during specific times of the year or during various seasons.It often exists year-round.
This frequently has an impact on sectors like tourism, construction, and agriculture.This is frequently found in undeveloped or impoverished nations.
It can be lessened by government initiatives like schemes for temporary employment.It can be lessened by development and economic growth.
It frequently only has a little impact on the work force.It can have a significant impact on the labor force.
Often temporary in natureCan be long-term or permanent
Demand swings during the seasons are what lead to unemployment.Lack of possibilities for productive work and an excess of labor are the main causes of unemployment.
Policies from the government can be useful in reducing the consequences of seasonal unemployment.In order to solve hidden unemployment, government policies alone are insufficient.
It can be resolved by offering job search support and training for new skills.It can be resolved by encouraging economic growth and the creation of new jobs.
The labor force is not permanently affected by seasonal unemployment.Low productivity and underutilization of the labor force are caused by concealed unemployment.
A normal component of a market economy is seasonal unemployment.Covert joblessness is a sign of deeper structural issues in the economy.
It enhances production, but only in specific seasons of the year.It doesn't increase productivity because output would not be impacted by the absence of a few employees.
Skill and industry diversification can aid in lowering seasonal unemployment.Reducing disguised unemployment can be achieved by increased industrialization, education, and workforce distribution.
It is the state in which a person gives the impression of being employed but actually contributes nothing to productivity. That is, even without him, the production would not change.It is the state in which a person experiences difficulty finding employment in specific months of the year.
Example: Agricultural laborers only find employment during the busy seasons-that is, when crops need to be sown, harvested, weeded, and threshed. This is a result of Indian agriculture's seasonal nature.Example: When two people are pretending to be unemployed while five people complete a task that only needs three people to complete.

Difference Between Seasonal And Disguised Unemployment

Conclusion

Unemployment wastes the nation's human resources and increases the economic load, converting assets into liabilities.

"Disguised unemployment" is the term used to describe the situation where an individual does not contribute anything to total production. Conversely, "seasonal unemployment" happens during a particular time of year.

Disguised and seasonal unemployment share some similarities, but they are not the same thing. A shortage of demand and a decline in inventory are the reasons for the differences. A country's firms can attempt to reduce expenses, which could lead to disguised unemployment. As a result, companies are thinking of cutting staff to ensure the quality and quantity of their product are maintained.

Due to this kind of unemployment, people are forced to work less than they can. Conversely, seasonal unemployment transpires during periods of excess labor supply, which translates to elevated rates of unemployment. When additional staff is not required to handle business activities, employees in this situation are either laid off or placed on part-time status for a while.






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