Full employment or low level of unemployment Flashcards
What is full employment?
the level of employment where those who are economically active can find work if they are willing to accept jobs at the going wage rate.
What does it mean to be economically active?
Either in work or seeking work- working population who contribute to the economy
What is unemployment?
Those people who are able, available and willing to work but cannot find a job despite an active search for work.
Examples of people who are NOT considered unemployed (economically inactive)
- students in full-time education
- pensioners
- discouraged workers
- sick/disabled people
- housewives/husbands
Problems of unemployment:
- scare human resources are not being used to produce goods and services to meet peoples needs and wants
- waste to an economy
- increased crime, alcoholism, vandalism
- lower personal incomes and lower standards of living
- poor physical and mental health
- fewer skills acquired
- loss of tax revenue
Issues of claimant count- method of measuring unemployment
- not all unemployed will claim
- some deterred bc cannot prove they are looking for work
- part-time workers
- may fraudulently claim
- underestimates actual unemployment levels
Issues of labour force survey measure- unemployment
- subject to sampling errors
- may not be representative
Difficulties with measuring unemployment
under-employment: may be working fewer hours than they want
inactivity rates/ leaving job market: long-term unemployed may have been discouraged
