Emplyment And Unemployment Flashcards
What are the two measures of unemployment
The claimant count
International labour organisation (ILO)
What is the criteria for the claimant count
- out of work
- available for work
- actively seeking work
Who can sign on for benefits with the claimant count
Aged 18-65 if unemployed and fulfil criteria
What are the benefits of the claimant count
- easy to calculate and quick
- easy to see trends
- can help the government makes informed decisions (invest in apprenticeships)
What are the weaknesses of the claimant count
- rest if EU doesn’t use it
- misses out people who are retired/students etc.
- misses people who are ashamed to claim benefits
What survey is taken by the ILO
Labour Force Survey
Official measure used in the UK
What does the survey entail? (ILO)
A face to face interview followed by a telephone survey of 60,000 households with over 100,000 adults
Questions related to anyone over 16
What does the survey cover? (ILO)
- Household size
- Accommodation details
- Basic demographic characteristics: age, sex, marital status and ethnic origin
- Economic activity
What classes you as unemployed in the Labour Force Survey?
- without a paid job
- available to start a new job in a fortnight
- looked for work in previous 4 weeks
What is a weakness of the survey?
The survey data is 6 weeks out of date by the time that is has been published
What is the claimant count?.
A measure of unemployment which records the number of people who are claimed Jobseeker’s Allowance (JSA)
What is the difference between unemployment and under employment?
Unemployment is a situation where someone who is seeking a job can’t find a job where as under employment is where someone is working but maybe not to their full capacity
What does inactivity mean in terms of employment?
Those who are not in work and don’t satisfy all criteria for the ILO unemployment e.g. those in retirement and those not seeking work
What are the four causes of unemployment?
- structural unemployment
- frictional unemployment
- seasonal unemployment
- demand deficiency and cyclical unemployment
- real wage inflexibility
What is structural unemployment?
When the person hasn’t got the skills required
E.g. A doctor trying to do a teachers job
What is frictional unemployment?
People who move from one job to another fairly quickly
People willing to change jobs to improve their prospects
What is seasonal unemployment?
Demand for labour varying over the year
E,g, travel agents only doing beach holidays = unemployment rises during winter and lowers during summer
What is demand deficiency and cyclical unemployment?
When there is insufficient demand in the economy for all workers who wish to work at current wage rates to obtain a job
What is real wage inflexibility in terms of employment.,
Wages can’t drop due to minimum wage so firms can’t afford to pay workers so some are made unemployed as they can’t work for below minimum wage
What is the classical view of migrants and employment?
Immigration causes unemployment
What impact does immigration have on unemployment?
- number of jobs increases when net migration increases - migrants earn wages of which are spent, flowing round the circular flow of income creating jobs
- migrants are more flexible than domestic workforce and take jobs in industries where there are shortages
- often underemployed, take jobs beneath their skill set as they need to earn money quickly
What are the effects of unemployment on consumers?
People have lower incomes and living standards fall
What are the effects of unemployment on firms?
People spend less, will have to lower prices, make less profit
What are the effects of unemployment on the government?
The government has to pay more in Jobseeker’s benefits and receive less taxes
