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Difference between Disguised and Seasonal Unemployment
During the past few years, the rate of unemployment has been continuously climbing. Businesses have been forced to scale back operations due to the widespread of the coronavirus, and as a result, some employees have been let off. A number of businesses are now in a position where they can do nothing except shut down.
Despite being a pervasive issue, unemployment can have a variety of root reasons. For instance, organizations with busy and quiet periods may add and subtract employees at different times of the year. The following few paragraphs will differentiate between two types of unemployment− seasonal and hidden.
What is Disguised Unemployment?
It's a kind of unemployment that occurs when a section of the workforce becomes irrelevant due to a lack of output or a dismissal. Because of this, this subset of the jobless has no impact on economic output as a whole. Those who are engaging in disguised unemployment are either performing below their talents or are engaged in income−generating activities that provide little benefit to either them or the economy.
When a country with a sizable population also has rapid economic growth, a labor surplus often results. It also occurs often in the informal sectors of the labor market, such as agricultural markets. In spite of the fact that it constitutes a kind of unemployment, the number of persons in this situation is not factored into official statistics on the subject.
The following are examples of forms of hidden unemployment −
People who are unable to work due to illness or disability nonetheless have valuable contributions to make to the growth of the economy, notwithstanding their limitations.
A person is regarded to be underemployed if they work fewer than 30 hours per week. This group also includes those who accept jobs that are beneath their abilities.
People who have stopped actively seeking employment are not counted among the jobless.
What is Seasonal Unemployment?
When the demand for workers is lower than usual, like during certain times of the year, people are said to be unemployed during certain times. Seasonal unemployment describes this situation. Some businesses, like resorts, hire more people during the holidays to accommodate the increased demand for their services. As the Christmas season is often a slower time for businesses, it is possible that some employees may be let go.
Whenever governments calculate unemployment rates, they factor in seasonal changes. For this reason, seasonal unemployment rates impact the overall unemployment rate statistics.
While seasonal unemployment is typically unavoidable, it can be mitigated by the creation of off−season job possibilities and economic diversification, especially in the hotel sector. Governments can also impose regulations that make it so businesses can't just sit on the money they make during the high season; they have to use it to pay employees all year long. This is on top of the regular wages that are paid to staff during the busy season.
Differences: Disguised and Seasonal Unemployment
Both of these types of unemployment reduce an economy's ability to produce wealth. The following table highlights how Disguised Unemployment is different from Seasonal Unemployment −
| Characteristics | Disguised Unemployment | Seasonal Unemployment |
|---|---|---|
| Definition | Disguised unemployment occurs when a worker is no longer needed in the workforce due to their inefficiency or they are let go from their role. | When people are unemployed at times of the year when the demand for labor is lower than during other times of the year, we say that they are suffering a kind of unemployment known as seasonal unemployment. |
| Sectors | High rates of "hidden" unemployment are a serious problem in the agriculture business. | Seasonal layoffs are commonplace in businesses dependent on the agricultural sector. |
| Example | One sort of unemployment called "hidden unemployment" occurs when more people than necessary are employed to execute a work that only requires three people. They're two more folks who are faking unemployment to get by. | The tourism business is one that is particularly vulnerable to fluctuations in the labor market. Workers in this sector are typically laid off during the off−season and replaced with fresh faces come spring. |
Conclusion
Disguised unemployment occurs when a worker is no longer needed in the workforce due to their inefficiency, or they are let go from their role. This method is widely utilized in the agricultural sector.
Seasonal unemployment, on the other hand, occurs when workers are out of work at times of the year when there is a lower demand for labor than at other times. This type of joblessness typically occurs throughout certain times of the year. It's pervasive throughout the farming and food production sectors. While each of them causes its own unique drop in income and GDP, they all have this common outcome.
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