3.2 - low unemployment Flashcards
employment
the use of labour in the economy to produce goods and services
unemployment
occurs when workers able and willing to work at the current wage rates are unable to find uemployment
full employment
occurs when an economy is using most of its workers to produce output, no cyclical unemployment
how is unemployment measured
claimant count
what is claimant count
main way the UK government measures unemployment according to the number of people who are claiming unemployment-related benefits
what is the level of unemployment
the number of people in the working population who are unemployed
what is the rate of unemployment
percentage of the country’s workforce that is unemployed
what is the calculation for unemployment rate
no of unemployed/workforce * 100
what are the types of unemployment
seasonal, frictional, cyclical, structural
what is seasonal unemployment
lack of employment caused by a fall in demand during a particular season
what is frictional unemployment
lack of employment caused by time lags when workers move between jobs
what is structural unemployment
caused by a permanent decline of an industry or industries
what is cyclical unemployment
lack of employment caused by a lack of demand in the economy
benefits of unemployment
workers who quit their jobs seek for better pay
if there is a lot of unemployment, this keeps wage rates down and can be good for firms as the unemployed workers are competing for the jobs, the firms do not have to raise the wage rate to attract them
as wage rates are kept down, this makes costs lower and firms are more internationally competitive. This may help them to compete with firms producing in other countries.
costs of unemployment to individuals
lower living standards, loss of status and self-esteem. relationship problems, excluded workers, costs to tax payers
