Unemployment Flashcards
What is real wage unemployment?
Where wages are forced above the normal market rate causing an excess supply of labour.
What causes real wage unemployment?
Powerful trade unions demanding excessive pay rises or the minimum wage rate being set too high.
What problems face the unemployed?
They are more likely to have heart attacks and strokes, pensions are not transferable, more likely to be depressed, little access to social support networks, less likely to mix with people at work and increases the chances of marriage break-up.
What are the problems that society faces due to unemployed people?
The NHS will have to pay to treat the health-related problems, more people will be seeking JSA and more social support networks will have to be created to help the unemployed.
What are the consequences of unemployment?
AD would shift inwards as it is likely that there will be less consumption and the average income levels would decrease.
What is the benefit of average income levels falling?
Employers could reduce wages.
What are the costs of unemployment that an individual has to face?
They lose skills, they have lower incomes and they face a loss of real living standards.
What are the costs and benefits of unemployment that a business has to face?
There is a larger potential pool of labour which means that there are better quality applicants, there is a lower pressure on wages however business see less demand for goods which means lower profits.
What are the costs of unemployment that the economy/government face?
There is a less productive workforce due to the health problems so the productive capacity reduces, there is an increase in crime due to more poverty and inequality and as income levels are generally lower this means that there is a fall in income tax.
What are the costs of unemployment that the economy/government face?
There is a less productive workforce due to the health problems so the productive capacity reduces, there is an increase in crime due to more poverty and inequality and as income levels are generally lower this means that there is a fall in income tax.
What is the effect of a fall in income tax on the government?
It means that they may have to borrow more which would worsen the budget deficit.
What is the effect of a fall in income tax on the government?
It means that they may have to borrow more which would worsen the budget deficit.
What is structural unemployment?
The long-term unemployment caused by the changing structure of the UK economy - it leads to a mismatch between the skills offered by workers and the skills actually required by expanding industries.
Why can structural unemployment be the most problematic type of unemployment?
Occupational mobility and geographical immobility.
What is occupational immobility?
Workers may find it hard to retrain
