Unemployment Flashcards
Unemplyment
People who are available and actively looking for employment but can not find a job
Why measure unemplyment
Key indicator if economic performance
Major social problem
Governement need to know scale of problem to fix it
2 Ways to measure unemployment
Claimant count
The Labour force survey
The claimant count
Published each month showing amount of people claiming job seekers allowance
The labour force survey
Unemployed people actively seeking work for past 4 weeks, ready to start work in 2 weeks, people starting work 2 weeks
Frictional umenployment
When workers leave one job and spend some time looking for a new one Reasons: Better wage Dislike their job Made redundant Sacked
Seasonal unemplyment
Consumers demand for some goods and services are seasonal
E.g more workers will be employed during the summer seasons as tourism increases so when winter season comes employees will be sacked
Cyclical unemployment
Happens when there is too little demand for goods and services in the economy during a recession
E.g firms may cut production and workers cause of no profit
Structural unemployment
Arises for long term changes in the structure of the economy as an entire industries close down because of lack of demand of goods and services they produce or production moves to countries overseas
Regional unemployment
If most of the firms are located in a pericular area then there may be a structural change as employees may be fired as cheaper labour is found in developing countries
Technological unemplyment
Industrial robots and computerised machinery has been substituted for labour
Problems with the claimant count
People who are over the state pension age are not eligible
People not looking for full time work are not eligible
People working in the black market are not eligible
Problems with the labour force survey
Measures only fraction of country
Students and people on sick leave are classed as unemployed
Difficult to tell if someone is seeking work or are unemployed
Effects of unemployment on iduviduals
Reducinging income while still have major spending commitments
Reduces living standards
Reduces efficiency as worker loses skills, fitness and motivation
Social effects of unemplyment
Reduced status lead to social exclussio
Increased health problems
Less confidence
Family breakdown
Effects of unemplyment on buisnesses
Fall in demand for products’ fall in sales and. Profit
Buisnesses go out of business
Bigger rage of labour
Less pressure to pay higher wages
Economic Costs of unemplyment
Lost output
Reduced spending in the economy effecting other jobs
Reduced taxation revenue for government
Social costs of unemplyment
Increased crime rate
Civil unrest
Increased burden on health system
Local shops shut down
Government costs of unemplyment
Other priorities suffer/schools
Tax receipts fall as incomes fall
Government becomes unpopular
Infaltion
Rise in the general level of prises
Reatail price index
The headline rate of inflation
Consumer price index
RPI without housing costs or council tax costs
CPIH
This includes housing costs
Deflation
Sustained fall in the average price level in the economy
Disinflation
Fall in the rate of inflation
Stagflation
Persistent high inflation combines with low economic growth
