Unemployment Flashcards
unemployment
the people available & willing to work but can’t find a job despite actively searching
- scarce human resources aren’t being used to peruse g/s that help to meet peoples changing needs and wants
ways to measure unemployment
- CLAIMENT COUNT = records no. peeps registered as claiming unem. benefits
- LABOUR FORCE SURVEY = counts those without a job but have looked in past month and can start immediately
level of unemployment
number of people unemployed
rate of unemployment
number of people unemployed as a % of the labour force
no. unemployed/labour force x100
costs of unemployment
ECONOMIC :
- lost output
- drop in tax revenues & higher welfare ( budget deficit)
- decline in labour supply ~ move oversea
SOCIAL :
- increase in relative poverty & welfare benefit dependancy
- extra demand on NHS (stress & depress)
- link between persistent
- lower living standards
types of unemployment : seasonal
regular seasonal changes in employment / labour demand at different times of the year
(ski instructors)
types of unemployment : structural
arises from mismatch of skills and job opportunities as pattern of labour demand changes
often involves long term unemployment and labour immobility
types of unemployment : frictional
transitional unemployment due to moving between jobs
types of unemployment : cyclical
caused by fall in, or persistent weakness, of levels of aggregate demand leading to a decline in real GDP and jobs as businesses lack confidence that the demand will return (sacked for financial reasons)
this is when unemployment occurs in a recession or slump
policies to reduce unemployment: labour demand
- quick and can be targeted
- expensive, gov pays more than receives
CUTTING COST OF EMPLOYING WORKERS :
- financial support for apprenticeship programmes
- extra funding / business grants
COMPETITIVENESS POLICIES :
- reductions on corp tax ~ increase invest.
- tax incentives for research / innovation spending
- enterprise policies to lift rate of new business start ups
policies to reduce unemployment : labour supply
- effective & doesn’t raise prices or inflation
- slow to be effective
REDUCING OCCUPATIONAL IMMOBILITY :
- better funding for more and more effective training & teach new skills
IMPROVING GEOGRAPHICAL MOBILITY :
- rise in house building - keep prices low and encourage more affordable rent
STIMULATE STRONGER INCENTIVES :
- high min. wage or living wage
- reductions in income tax / national insurance
consequences of unemployment
FOR GOV :
- lost output (waste of resource)
- increased spending on job seekers allowance & employment programs
- lost tax revenue through lower income tax receipts & lower consumption
FOR BUSINESSES :
- reduces demand for g/s ~ reduces profit
- reduces productivity and moral of workforce ~ concerned over future job loss?
- less incentive to invest
FOR WORKERS :
- lower living standards
- financial costs ~ job search & staying home (utilities)
- longer you’re unemployed, more “de-skilled” you get ~ human capital diminishes
