chapter 13 employment and unemployment Flashcards
what is unemployment ?
and unemployment rate
this includes all those seeking work at existing wage rates that cannot find employment
unemployment rate - the number unemployed/ the labour force x 100
what is the labour force and what is the labour force participation rate ?
it is defined as the total number of workers ( between the ages of 16 and 65) who are available for work. it refers to all people wo can contribute to the production of goods and services
the labour force participation rate - the number of people who are employed and unemployed but looking for a job divided by the total working age population. for most economies the rate is between 50-70%
what the methods in which unemployment is measured in Ireland?
- the live register ( update automatically) - the live register is used to provide a monthly series of the numbers of people (with some exceptions) registering for jobseekers benefit (JB) or jobseekers allowance (JA) or for various other statutory entitlements at local offices of the department of social protection. this can capture all those seeking employment. it adds the number of people who sign on for job seekers
- the labour force survey (LFS) - The LFS is a large scale, nationwide survey of households in Ireland. it is designed to produce quarterly labour force estimates that include the official measure of employment and unemployment in the state( shown on CSO.ie)
what is the labour force survey more accurate than the live register ?
- the live register includes those who receive partial social welfare payments - some people who work part time may still be entitled to additional social welfare payments, so while technically not unemployed as they do have a job, they would count as unemployed on the Live register
2.signing on while working in the hidden economy - some claimants receive jobseekers so are on the live register, but are also working off the books so they actually do have a job
- voluntarily unemployed included - some people may not want a job but continue to sign on the live register, so are included even though they are not actively seeking work
- the LFS is a large sample size - the CSO surveys a large number, increasing the accuracy of their results for the unemployment rate
what is full employment ?
this refers to a situation in which all those members of the labour force who are willing and able to work are employed// at existing wage rates.
full employment comes about from a sustained period of economic growth.
an unemployment rate of 4% indicates that an economy has reached full employment. this included people in between jobs
it is usually associated with a “peak” in a trade cycle
what are the benefits to Ireland of having high levels or increased levels of employment
- higher government current revenue(income tax, PRSI, USC)
-less government spending on social welfare/ jobseekers allowance
- confidence and ability for people in work in progress and develop skill/capacity to be able to produce and earn more
-skills and spreads skills of workforce which helps attract more FDI and also encourage more indigenous business to form to take advantage
what are the challenges to Ireland of having high levels or increased levels of employment
-pressure on infrastructure - need for more housing (population up), public transport, roads, traffic congestion, inward migration
-demand-pull inflation - upward price pressure as people as people want more goods, firms can’t increase output due to no available staff
- labour shortages- employers may find it difficult to expand or increase production due to a lack of suitable available labour, causing wage pressures and lower economic growth, as well as lower quality/ loss of service
what is underemployment ?
when labour is at use in a job where they are working below their capacity
eg a worker being held by a company during a downturn so that they keep them for when the economy picks up again - they may not be busy or producing much
eg a commerce graduate can’t find a job in a bank and works part time in a café instead - so their qualifications aren’t being utilised effectively
why do some businesses in Ireland are experiencing labour shortages, even though some people remain unemployed?
1.skills shortage- there is a shortage of skilled labour in many sectors across the Irish economy. This shortage has been felt particularly in construction
- wages considered unattractive - in some sectors the wages may not be good enough to attract workers such as the hospitality sector, nursing
3.exodus of foreign workers- some sectors are now suffering staff shortages because of an exodus of foreign workers leaving the state or not coming at all because of work visa issues/ returned home during Covid-19/ high inflation in Ireland.
- reductions in workers due to Covid-19- during the pandemic some workers were made redundant and left their particular sector causing labour shortages eg Dublin Airport
types of unemployment - structural unemployment
occurs when a changing pattern of demand in the economy/ or increasing mechanisation ( technical progress) eg machinery. Some jobs are no longer needed due to shifts in how things are sold/produced eg Tesco workers being replaced by self checkout machines
types of unemployment - cyclical unemployment
when there is a downturn or contraction in the economy (eg recession), there is a fall in demand for goods and services, so employment numbers tend to fall. eg jobs lost due to Covid
eg construction jobs lost during housing bust
types of unemployment - frictional unemployment
this occurs due to the time it takes someone to move between jobs i.e. the time it takes from when they lose or leave their job, to the time when they take up new employment
eg waiting for the right job
eg a football manager looking for an opening in the right club
types of unemployment - seasonal unemployment
unemployment that occurs at certain times of the year eg in the tourism sector, lots of people find themselves with no job in the winter months when there is less demand for tourist activities like surfing eg the hospitality and tourism sectors
types of unemployment - institutional unemployment
this arises due to obstacles to the mobility of labour (geographical and occupational - the ease of moving location for work ) it arises when there is a shortage of housing in areas where jobs are available or the removal of the incentive to work ( social welfare too high or to close to the minimum wage ) , as well as institutional arrangements ( a high minimum wage restricting employment
what is the living wage ?
it is a wage which makes possible a minimum standard of living and is grounded in social consensus (not the cost of living). it is based on the concept that work should provide an adequate income to enable individuals to afford a socially acceptable standard of living. the living wage should provide for your needs not wants (below it means you are forced to do without essentials/ can’t make end meet)
2023 - €13.85
2024 -€ 14.80 per hour
