Question

seasonal changes in labour demand occur in industries like construction , tourism, catering and agriculture. explain how.

(need 500-600 words with figure if possible)

Answer 1

o The concept of seasonal demand for labor is closely related to seasonal demand for commodities in an economy during a year. Many goods and services experience fluctuations in their production and sales due to the variation in their demand during different seasons. Seasonal demand of labor is more or less positively correlated with the seasonal demand of goods and services. Higher the demand of goods in a specific season more is the demand of labor to meet the necessary production during that season and vice a versa.

o This gives rise to situation what we call as seasonal unemployment. So when the demand of a particular good or service falls in an economy the demand for labor too falls (keeping other factor of production constant) leading to seasonal unemployment.

o Seasonal unemployment is a kind of involuntary unemployment that leads to underutilization of resources during non-peaks seasons. Seasonal unemployment is very much predictable, as it is certain during which time of the year the demand for commodity would fluctuate. i.e. would it experience a peak or a trough.   

o Such unemployment is a problem majorly for low-income groups, as they are able to earn money only during a specific time of the year, and rest of the year they either remain unemployed or get work after facing prolonged struggle. Thus, overall they earn less money that affects their living standard.

o Seasonal unemployment could also be beneficial for some specific groups of the economy such working students who work during the peak seasons and during the non-peak season when labor demand is low, they focus on other areas of their interests such has developing some skills, completing studies, etc.

o Refer to the below figure, where demand for labor is given as downward sloping curve with respect to wages. X- axis shows labor employment and the Y-axis shows wages. The initial labor demand curve DL1 intersects the upward Labor supply curve at point 1.

- During peak season, when the demand of any goods or services is high, the demand for labor required for its production increases. This shift the labor demand curve rightwards from DL1 to DL2, which causes an upward pressure on the wage rate to rise from W1 to W2. Employment increases from L1 to L2

- During off seasons, when the demand of any good or services fall, the demand of labor attached to that industry too falls. Here the demand curve shifts leftwards from DL1 to DL3. At the original wage rate W1, the supply of labor exceeds the demand that causes unemployment = L1 – L4.

o Some of the industries where seasonal unemployment is very much prevalent are :

1. Agriculture Industry :

In any country, agriculture plays an important role in the occupational structure of its economy. A good proportion of individuals are involved in day to day activities under the agricultural sector, which involves crop harvesting, breeding, crop-nurturing and other farming related jobs. Some crops are sown and harvested during a specific time of the period only. During such periods the demand for agricultural labor is higher as compared to the other periods of the year. Thus, agricultural farmers remain unemployed during the reamaining part of the year.

2. Tourism Industry:

In many countries, tourism plays an important role in its GDP growth. Many skilled and unskilled labors are a part of any tourism industry. Tourist guides, destination experts, hoteliers, transportation companies, etc contribute to a large part of the tourist industry of any country. During peak seasons when any country faces a large footfall of tourist, more labor is required to meet the required demand. For, example countries which are famous for its beautiful beaches see a lot more tourist coming during sunny or spring season as compared to rainy and high tide seasons. In peak seasons, there would be more demand for accommodation so hotels have to have enough staff to cater their needs. However, in off season when foot fall of tourist is very low, the hotelier might want to get away with the temporary staff that are not required at the moment. Such situation leads to seasonal unemployment.

3. Catering Industry

Chefs, waiters, bar-tenders are a significant part of the catering industry. Many countries especially like India faces a high demand of caterers during wedding seasons. However, during non-weeding season the demand of caterers is low and they have to look out for other events to meet their needs.

4. Construction Industry is another important industry in which workers, especially migrant workers experience lags in their employment. 1. Generally, construction industry is at peak during summer season in many countries as compared to winters when the workers face most of the unemployment.