Unemployment Flashcards
Define employed
People in paid work. Includes employees and those who are self-employed.
Define unemployed
Those of working age, who are actively seeking employment, willing and able to work but do not have a job.
Define full-time employment
Working the hours/days associated with a particular job.
Define part-time employment.
Working a proportion of the hours of a full-time job.
Define the active population
The labour force of working age 16-65.
Define the inactive population
People age 16-65 not seeking work, such as students, children, the retired, etc.
Define underemployed
Employees who are either seeking to work longer hours/full-time or those working in jobs below their skill level. E.g. someone with an astrophysics degree working for McDonalds.
How does the claimant count measure unemployment?
The claimant count records all claiming Job Seekers Allowance.
What are the prerequisites for JSA (4)?
You must be over 18 years old, not be in full-time education, be available to work and be actively seeking work.
Who conducts the UK Labour Force Survey?
The Office for National Statistics (ONS).
How does the UK Labour Force Survey measure unemployment?
Approx. 40,000 households and 80,000 individuals are interviewed about their employment situation, and the results are scaled up to represent the whole of the UK’s population.
The ONS uses the International Labour Organisation’s (ILO) definition of unemployment. What is their definition?
Anyone over the age of 16 can be classified as employed, unemployed or economically inactive.
What are the 5 causes of unemployment?
1) Frictional unemployment
2) Seasonal unemployment
3) Structural unemployment
4) Cyclical (or demand deficient) unemployment
5) Real wage inflexibility
Define frictional unemployment
Short-term unemployment as workers move between jobs. The rate of this depends on employment opportunities, the level of unemployment benefits and redundancy pay. It is the most common type of unemployment and also the least concerning.
Define seasonal unemployment
Unemployment caused by seasonal labour demand shifts. E.g. tourism jobs plummet in the winter and peak in the summer, retail jobs peak near Christmas.
Define structural unemployment
Unemployment stemming from industrial reorganisation, such as an industrial decline or technological advancements. E.g. the mining industry’s decline in the UK.
Define cyclical unemployment
Unemployment caused by a fall in AD due to shifts in the trade/business cycle. There are less jobs available in a recession, and more available in a boom.
Define real wage inflexibility
Unemployment caused when real wages are stuck at a level above what is needed to reduce unemployment. Firms may be willing to pay workers less and workers may be willing to accept this, but factors like the minimum wage prevent the price of labour from falling.
What are the benefits of migration for an economy (6 factors)?
1) Migrants are less likely to claim benefits.
2) Migrants increase employment figures and are usually of working age.
3) They represent good value for money for firms as they are hard working but demand less money.
4) Migrants close skills shortages, such as in healthcare.
5) Larger workforce.
6) More tax payers.
What is a drawback of migration for an economy?
Increased migration increases the supply of labour , reducing the equilibrium price, causing wage rates to rise slower than inflation.
What are the drawbacks of unemployment to firms (2 factors)?
1) A loss of demand for their goods/services, as consumers have less disposable income.
2) Long-term unemployment can cause skills shortages, making it hard for firms to find high quality workers.
What are the drawbacks of unemployment to the government (4 factors)?
1) Increased benefit payments.
2) Loss of income tax and national insurance.
3) The cost of retraining workers.
4) The cost of subsidising employers to encourage employment.
What are the impacts of unemployment to local communities (4)?
1) Increased crime rates.
2) Run-down housing.
3) Closing of local businesses.
4) Degrading of the local environment
What are the impacts of unemployment to the unemployed (4)?
1) Stigma of being unemployed.
2) Loss of earnings.
3) Increased chances of mental health issues, e.g. depression, stress and family breakdowns.
4) Long-term costs of deskilling, making it harder to find a new job.
