Unemployment

Question 1

What is employment?

Answer 1

Being in paid work by an individual/ firm or self employed.

Question 2

When does underemployment exist?

Answer 2

When part-time workers want to be full-time, when people aren’t utilising their skills in their work.

Question 3

What is unemployment?

Answer 3

When those not in work are actively seeking work.

Long term is out of work for more than 1 yr.

Question 4

What are 3 forms of hidden unemployment?

Answer 4

Those not actively seeking but prepared to work, those who lose their job and are discouraged to get a new one, those who stay in education.

Question 5

What is the total population of working age?

Answer 5

Anyone above school leaving age, below retirement age.

Question 6

What is the labour force?

Answer 6

Anyone who is economically active.

Employed + Unemployed = Labour Force

Question 7

What is the economically inactive population?

Answer 7

Those of working age who are not seeking work.

Question 8

How is the employment rate and unemployment rate calculated?

Answer 8

E rate: Employed/ pop. working age

U/E rate: Unemployed/ Labour Force

Question 9

How is participation rate and inactivity rate calculated?

Answer 9

P rate: Labour Force/ pop. working age

I rate: (Unemployed + Inactive) / pop. working age

Question 10

State and explain the 5 types of unemployment.

Answer 10

Structural - Due to long term changes in demand

Frictional - short term u/e between jobs

Seasonal - changes in demand patterns during the year (eg. tourism in winter)

Cyclical - Low demand in the economy

Real wage - Wages are too high to employ everyone, or too low so people would rather claim benefits.

Question 11

How does the claimant count measure u/e?

Answer 11

The no of people claiming job seekers allowance/ universal credit (only those eligible for benefits)

Question 12

How does the international labour organisation (ILO) measure u/e.

Answer 12

Labour force survey - 44K households surveyed monthly.

Includes those who wan a job and has actively sought in the last 4 wks and able to start in 2 wks.

Also, those who have found a job waiting to start in 2 wks.

Question 13

Who are 3 groups of people ineligible for JSA/ universal credit?

Answer 13

Those actively seeking but their partner’s wage is too high, old people receiving pensions but still seeking, those recently u/e and cannot yet register for JSA.

Question 14

What are 4 ways in which the measures can underestimate u/e?

Answer 14

They don’t include; underemployed, workers on training schemes who want work, those on benefits who want work, those ill/ disabled.

Question 15

What are 2 ways in which the measures can overestimate u/e?

Answer 15

Some people w/ health issues may not be ‘employable’, those who claim to be u/e to claim benefits.

Question 16

What are 2 ways in which both the employment and unemployment rate can increase?

Answer 16

Rise in net migration (most of them go into or seek work)

Rise in participation (more women/ young people)

Question 17

What are 2 benefits and 1 drawback of migration regarding employment?

Answer 17

Migrants are often more flexible than UK citizens + willing to take low income jobs. (find jobs quickly, take jobs UK citizens didn’t want anyway)

Migrants demand G/S ad drive demand increasing employment.

However, short term influxes of immigrants can put pressure on infrastructure (houses and schools).

Question 18

What are 3 costs of high u/e on individuals?

Answer 18

Less income, social problems (mental health), long term u/e causes loss of skills.

Question 19

What are 2 costs of high u/e on communities?

Answer 19

Increased crime, more run down areas (less £ to upkeep properties)

Question 20

What are 3 costs of high u/e on the economy?

Answer 20

Loss of output, costs to deal w/ social issues (crime), fewer skilled workers.

Question 21

What are 3 costs of high u/e on the government?

Answer 21

More spending required (welfare), less tax revenue (less income, less spending), cost of training schemes/ job centres)

Question 22

What are 4 benefits of high u/e?

Answer 22

Real wage rate falls (workers don’t demand pay rise), Firms have more choice of who to employ, more people set up businesses (enterprise), people have more leisure time (less stress)