cyclical unemployment

You have probably noticed how, in certain years, everybody seems to be job hunting at once. And not since people suddenly became lazy or unqualified, but because companies everywhere are cutting staff around the same time.

That pattern has a name. Cyclical unemployment is the joblessness that comes and goes with the ups and downs of the whole economy. When businesses are selling well and expanding, they hire. When demand dries up and orders fall, they lay people off, and not since those workers did anything wrong, but because there simply is not enough work to justify keeping them.

Think about a stretch when oil prices in Nigeria drop hard. Government revenue shrinks, contractors stop getting paid on time, and those contractors stop paying their own staff. Banks in Lagos start trimming headcount, event planners lose bookings, even the roadside food seller near the office complex notices fewer customers. Nobody in that chain lost their skill overnight. The whole economy simply slowed, and jobs went with it.

The United Kingdom saw this clearly during the 2008 financial crisis. Builders, estate agents, and factory workers were let go in large numbers, and not since the UK forgot how to build houses or make things, but because banks stopped lending and buyers stopped buying. Once the economy recovered, many of those jobs came back.

For someone abroad sending money home, cyclical unemployment matters twice over. If the UK or US economy dips, their own hours or job might shrink. And if Nigeria is in its own downturn at the same time, the family back home may need that support even more, right when it is hardest to send.

The comforting part is that cyclical unemployment is temporary by nature. It rises with the bad times and falls with the good, unlike unemployment caused by outdated skills or by whole industries disappearing for good.