2.1.3- Employment

Question 1

What is unemployment?

Answer 1

People who are of working age who are willing and able to work but can’t find a job

Question 2

What is long term unemployment?

Answer 2

People who have been unemployed for 12 months or more

Question 3

What is youth unemployment?

Answer 3

Measured unemployment rate for all 16-24 year olds

Question 4

What are the measures of unemployment?

Answer 4

-claimant count
-The International Labour Organisation (ILO) and the UK Labour force survey (LFS)

Question 5

What is the claimant count?

Answer 5

Counts the number of people claiming unemployment related benefits, such as job seekers allowance (JSA)

Question 6

What are the negatives of using the claimant count?

Answer 6

-not every unemployed person is eligible for or bothers claiming JSA
-those with partners on high incomes will not be eligible for the benefit

Question 7

What is the LFS?

Answer 7

It’s taken on by the ILO, and asks people their employment status and categorises them into employed, unemployed, or economically inactive

Question 8

What is bad about the LFS?

Answer 8

It’s only a sample so may not be accurate

Question 9

What is hidden employment?

Answer 9

People who don’t have work but aren’t counted in gov reports

Question 10

What is underemployed?

Answer 10

When people are looking for an extra job, would prefer to work longer hours, or are underutilised in terms of their ability

Question 11

How does unemployment affect workers?

Answer 11

-loss of income so decline in living standards
-decreased self esteem
-those in jobs will suffer from lower job security and a fall in wages due to large pool of labour
-long term unemployment could cause them to lose their skills

Question 12

How does unemployment affect firms?

Answer 12

-decrease in demand for goods so a fall in profit (depending on the YED)
-larger supply of labour to employ from, so lower wages

Question 13

How does unemployment affect the government?

Answer 13

-will have to spend more on JSA, which incurs an opportunity cost
-less revenue from tax
-could result in an increase in the budget deficit

Question 14

What are the types of unemployment?

Answer 14

-frictional
-structural
-seasonal
-cyclical

Question 15

What is frictional unemployment?

Answer 15

The time between leaving a job and looking for another job

Question 16

What is structural unemployment?

Answer 16

Unemployment caused by lack of suitable skills for jobs available

Question 17

What can cause structural unemployment?

Answer 17

-long term decline in an industry
-lack of geographical and occupational mobility
-globalisation and technological change

Question 18

What is seasonal unemployment?

Answer 18

Being unemployed due to the time of the year when there are seasonal changes in demand, production and employment

Question 19

What is cyclical unemployment?

Answer 19

Involuntary unemployment due to a lack of demand for goods and services within the country

Question 20

What is another name for cyclical unemployment?

Answer 20

Keynesian ‘demand deficient’ unemployment

Question 21

What could cause cyclical unemployment?

Answer 21

Increases in productivity which means fewer workers are needed to produce the same quantity of goods

Question 22

What is real wage inflexibility?

Answer 22

Unemployment as a result of real wages being above their market clearing level leading to an excess supply of labour

Question 23

What do migrants bring to the workplace?

Answer 23

High quality skills which can increase productivity and global competitiveness

Question 24

Why is migration bad?

Answer 24

It leads to lower wages as migrants are usually from economies with lower average wages than the UK and due to the increased competition for jobs

Question 25

Why do the skills of the workforce need to continuously improve?

Answer 25

In order to keep up with economies progressing and to prevent structural employment