The employment rate means the number of people that is presently employed divided by the population of working age. Unemployment is a situation where labour force participants are avaible, willing to work and actively looking for a job but are unable to find any jobs. Labor force is defined as the people above the age of 16 and older who are employed or are actively seeking employment. Unemployment rate can be calculated by dividing the number of unemployed with the labor force.
Changes in unemployment depend mostly on inflows made up of non-employed people starting to look for jobs, of employed people who lose their jobs and look for new ones and of people who stop looking for employment. The cause of unemployment in Malaysia varies. There are four types of unemployments, which include cyclical unemployment, frictional unemployment, structural unemployment and seasonal unemployment. Cyclical unemnployment of Malaysia happens when there is lack of jobs due to the downswing in a business cycle or a recession.
Due to this economy declines, the number of job layoffs crossways the world is rising extremely. The International Labor Organization affirmed that up to 51 million jobs worldwide could be eliminated due to the recession. Malaysia is no exception. Normally with an unemployment rate of 2% to 2. 5%, could rise to 4. 5% in that particular year. Since January 2009 about 10,000 Malaysians have been jobless. Another problem that causes the increasing of unemployment rate of Malaysia is that there are so many new job seekers each and every year.
Research shows that every year there are 600,000 new job seekers in Malaysia. This is when the frictional unemployment happens which people are in between jobs, entering and reentering the labor force. For example when people quit their jobs for a better position or higher wages or when fresh graduates are actively seeking for jobs. Even though these people are not working, but they are counted as part of the labor force because they are searching for jobs.
It is stated that structural unemployment is when jobs are available but the unemployed does not have the skills to fill these jobs. In Malaysia, the case is quite the opposite. There are many highly-qualified candidates, but they are too embarrassed to take on low-paying jobs, although a local spokesperson says that ‘job seekers should accept whatever job positions they can get’. That would decrease the number of people seeking jobs, which would decrease unemployment based on frictional and structural unemployment. Seasonal unemployment takes place hen seasonal variations happens during the activities of particular industries caused by climatic changes, changes in fashions or by the intrinsic nature of such industries. In Malaysia, there are a lot of opportunities in the plantation sector. With the typical weather of Malaysia, people in the plantation sector are able to grow crops all year round. Nonetheless, seasonal unemployment still takes place. For example, the sugar industry is seasonal in the sense that the crushing of sugar-cane is done only in a particular season. Such seasonal industries are bound to give rise to seasonal unemployment.