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What is Seasonal Unemployment?

Seasonal unemployment is when employers lay off workers from their current jobs due to decreased demand for labor at particular times of the year. For example, in tourism businesses, winter-themed resorts and ski parks attain their peak demand for just a few months in a year. Their workforce generally gets dismissed during the summer months.

It typically occurs in sectors with high demand in some months and no demand in others. It is not usually seen as an unexpected crisis, as it happens at the same time every year. This type of unemployment is temporary since the worker can find employment soon.

Key Highlights

Seasonal unemployment is temporary unemployment that occurs according to the rise and fall in demand for labor in particular sectors of the economy.

We observe this in the agriculture, tourism, manufacturing, and sales sectors.

Lack of multiple cropping, non-commercialization of seasonal crops, and lack of cottage industries are some of the main reasons behind seasonal unemployment.

It differs from disguised unemployment, as the latter refers to more labor supply than required.

Accurate forecasting, multiple/intercropping, suitable government measures, and employment shifting can be fruitful solutions.

How Does Seasonal Unemployment Work?

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A seasonal job has high demand during certain seasons or times of the year.

Many fields, including agriculture, tourism, manufacturing, and sales, employ people on a seasonal or part-time basis. For example, the employees in a ski resort may find a job at a beach resort during summer.

When any business or organization’s peak season ends, the employer discharges most workers to maintain a profit margin.

In this scenario, when the workers become unemployed, they can opt for other jobs during their peak season.

Examples of Seasonal Unemployment #1 Tourism #2 Agriculture

Farmers cultivate wheat in the months of winter and spring. If the farmers do not harvest other crops like barley, corn, or oats, they will be unemployed after spring, without any earnings for the rest of the year.

#3 Holiday Jobs

Christmas trees, firecrackers, and skateboards are sold mainly in winter, whereas beach wear and rafting boats draw customers in summer. If the sellers do not shift from one to another wisely, they become unemployed after a particular season.

For instance, due to holidays, the last five Decembers in the US have seen an increase in employment by more than 200,000. However, the number declined equally when the season ended, leading to seasonal unemployment.

Causes of Seasonal Unemployment Lack of Demand

Seasonal jobs have a peak season when more labor force is needed. This period sees the highest demand and earning potential in many industries.

Thus, employees are laid off during the off-season and must find another source of employment. During this period, a minimal workforce gets retained to keep the industry running.

Example: A person who works in a mango orchard might have to look for another job when the summer season gets over. Because there will be zero demand for laborers in the mango orchard after the fruits get plucked and sold.

Seasonal Nature of Specific Industries

The change of seasons often causes unemployment.

Many commodities sell only during certain times of the year.

Example: Umbrella manufacturers must find another way to earn money after the monsoon season. For this reason, farmers and holiday-based sellers like firecrackers and Christmas tree sellers also fall victim to seasonal unemployment.

Lack of Multiple Cropping

Farmers cultivate different crops at different times of the year.

If a farmer plans to do multiple cropping, he can produce and earn profit from his land all year.

Whereas dealing with a single crop can lead to seasonal unemployment.

Example: Mustard, a rabi crop, gets cultivated in winter and spring. On the other hand, rice is a Kharif crop that gets grown during the monsoon season. If a farmer can get hold of both, that will engage him throughout the year; otherwise, he will be unemployed for around six months.

Lack of Cottage Industries

Industries like pottery, candle making, handloom, soap making, etc., have a steady market all year long, engaging rural people.

The lack of cottage industries can lead to seasonal unemployment of contractual farmers and their families because other scopes of income are low in rural areas.

No Commercialization of Agriculture

Commercialization of agriculture helps a farmer receive profits from his yield throughout the year, even if it is a seasonal crop.

Without the same, he remains unemployed when the season is over.

Example: Before the monsoon sets in, the farmers reap rice grains. However, if they keep all of the harvests for household consumption, they can only store that for some time. Moreover, they need money for other necessities of life. Therefore, they sell their yields at the market for profit according to the fluctuations of price rates.

Solutions for Seasonal Unemployment Accurate Forecasting

Since seasonal unemployment is a yearly occurrence, it is reasonably easy to predict.

It gives businesses and individuals time to make remedies.

Once they have an idea of when the employer will downsize the workforce, the employees can start looking for other sources of income.

Example: When a business head informs employees about the season-end beforehand, they can prepare mentally and search for other possible work opportunities.

Employment Shifting

After being released from their duties, workers can find employment in a different sector.

It can help them remain employed all year round.

Example: Suppose a resort is famous for its ice sports and remains full of visitors in the winter, keeping all the employees very busy. But once winter is over, there are hardly any visitors for the rest of the year. At that time, as the employees had no work, they could find employment in a beach resort and continue their job. Although taxing, this ensures round-the-year engagement for the worker.

Multi-cropping or Inter-cropping

It is an agricultural practice where farmers grow different varieties of crops together, or one after another, according to the seasons.

It enables a good harvest and ensures money flow throughout the year.

A one-time-investment in good-quality farming equipment can also help with increasing the yield.

Example: If a farmer plans to harvest rabi and Kharif crops throughout the year, he will avoid seasonal unemployment once one crop season ends and another begins.

Government Action

Governments must introduce skill-building workshops to keep the workers engaged in different vocations during off-season months.

It is vital because seasonal work is a massive sector contributing heavily to the economy.

Differences Between Seasonal Unemployment and Disguised Unemployment

Seasonal Unemployment

Disguised Unemployment

Seasonal unemployment is a rise in unemployment when the demand for labor reduces. Disguised unemployment happens when a sector hires more people for a job than required.

Here, organizations employ people only for a specific time of the year. The employer keeps the workers employed around the year.

Productivity is optimal since there is high demand for workers during the season. Productivity is generally low since they hire more people to do the work than needed.

It affects sectors like tourism and agriculture due to their seasonal nature. It can affect any field where the workforce is in excess but low productivity.

Frequently Asked Questions (FAQs) Q1. What is seasonal unemployment?

Answer: Seasonal unemployment refers to a steep rise when the demand for labor and workforce reduces. We find this in the tourism and agriculture sectors. Thus, people working in these sectors must find other jobs with low labor demand.

Q2. What causes seasonal unemployment?

Answer: Seasonal unemployment results from the seasonal nature of specific jobs and low demand after the peak season. People engaged in such employment become unemployed after the peak season.

For instance, commodities like umbrellas sell only during certain times of the year. Thus, the organization needs a large workforce to manage the market. However, they release the crew after the season.

Q3. What is the difference between seasonal and disguised unemployment?

Answer: Seasonal unemployment refers to releasing employees from their jobs when the demand for labor is less after the peak season. However, disguised unemployment occurs when a job hires more people than required. Unlike seasonal unemployment, these employees work throughout the year. For example, consider a job that requires three people but employs four. This extra person comes under disguised unemployment.

Q4. Are there any benefits of seasonal unemployment?

Answer: Seasonal unemployment is predictable. The employees know that their job is short-lived and can therefore make arrangements beforehand. Also, when one season ends, another begins where workers can engage themselves accordingly.