Employment and Unemployment Flashcards
Active Population
Those in work or actively seeking work; also known as the labour force.
Activity Rate
The number of those in work or unemployed divided by the population of working age expressed as a percentage
Frictional Unemployment
Most workers who lose their jobs move quickly to new ones. The short term unemployment is called frictional unemployment.
Seasonal Unemployment
Some workers, such as construction workers or workers in the tourist industry, tend to work on seasonal basis. Seasonal Unemployment tends to rise in winter when some workers are laid off, while unemployment falls in the summer when they are taken on again.
Structural Unemployment
This occurs when the demand for labour is less then the supply of labour in an individual labour market. Considered a much more serious issue by economists.
One example is regional unemployment, the other is structural unemployment, when the pattern of demand and production changes, leaving workers unemployed when demand has shrunk in certain labour markets.
Cyclical Unemployment
Unemployment that has occurred due to the economy is not on the boom phase on the business cycle.
Real Wage Unemployment
Unemployment that has arised due to an increase in real wage. An example of real wage unemployment is from minimum wage.
Impact of Unemployment
- Poverty
- Skill Loss
- Social Problems
- Poor Health
Solve Unemployment
- More firms in the country
- Reduce minimum wage (reduce cost of labour)
- Reduce immigration
- Encourage investment (reduce taxes)
- Protect domestic workers
- Reduce legislation/red tape to encourage startup
- Provide subsidies/reduce cost of startup
- Encourage competition
Measuring Unemployment
- Claimant Count - Records those claiming unemployment benefit (Job Seekers Allowance) and can prove they are actively looking for work. It excludes housewives and those on training schemes.
- The international labour organization (ILO)
- The UK labour force survey
