If workers displaced by automation are unable to find new jobs quickly, frictional unemployment
will rise, putting downward pressure on wages.
Both frictional unemployment
and structural unemployment involve workers who are searching for a job, but, in order to secure a position, workers who are structurally unemployed must do something in addition to just searching.
Unfortunately, however, intuitive understandings can lead to technological unemployment being conflated with frictional unemployment
Such temporary spells of unemployment are referred to as frictional unemployment
For instance there are the differences between frictional unemployment
versus cyclical unemployment versus structural (or long-term) unemployment (Myrick, 2012; Holzer, 1993; Schwartz, Cohen & Grimes, 1986; Gilpatrick, 1966).
arises from the unemployment of individuals who are changing jobs in response to temporary layoffs, workers quitting jobs to find new ones with better pay or job conditions, and persons entering or leaving the labor force.
arises from the ever-present movement of people into and out of jobs.
Cyclical unemployment corresponds to business cycles, structural unemployment occurs when the jobs that are available do not match with the skill sets of the unemployed workers, and frictional unemployment
corresponds to the turnover of labor.
But, given the structural changes in the workforce to which I refer later, I wonder whether a higher rate of frictional unemployment
may not have been a factor in the higher overall rate of unemployment.
Here, it is suggested that even in this period of economic recession there is a need to understand the nuances of frictional unemployment
and that firms should be forward looking in anticipation of labour mobility and shifts in the demand for labour.
One can hypothesise what ratio of unemployed to vacancies is a measure of frictional unemployment
, or what share of vacancies reflects lack of skills among the unemployed.
They provide powerful motivation for theories of frictional unemployment