Saudi Arabia has been one of the wealthiest countries in the world, yet there is a high rate of unemployment. There are around 6 million foreign workers in Saudi Arabia. The wealth of the kingdom does not necessarily mean that all of its citizens are employed. Many Saudi nationals are suffering from high levels of unemployment and depressed wages. The increasing rate of unemployment in Saudi Arabia raises concerns that must be addressed to ensure proper economic development. The main reason for this increasing rate of unemployment is due to the influx of low cost low skills foreign workers. This paper will look at issues relating to unemployment is Saud Arabia. The paper will provide a definition of unemployment as well as the types of unemployment. It will also look at the causes and the effects if unemployment, the rate of unemployment in Saudi and the prevalence of unemployment in various sectors of the economy. The paper will also look at solutions to the problem of unemployment and recommendations that are intended to solve this issue. Unemployment is a situation where an individual who is willing and able to work is not able to get a job. The different types of unemployment include cyclical unemployment, frictional unemployment, classical unemployment and structural unemployment. Classical unemployment occurs when the wages associated with jobs are set above the market level such that there are high numbers of job seekers that exceeds the available vacancies. Cyclical