Unemployment and Employment Flashcards
What is the claimant count?
This is the official goverment method of calculating unemployment. It counts the number of people receving job seekers allowance.
Cons:
Excludes many people who might be looking for work, it excludes people over 60/under 18
Very strict rules meansyour can lose JSa very easily i.e if you miss an interview.
Some people may claimbenefits whilst working in the black market.
What is the labour force survey?
this is a survey asking 60,000 people whether they were unemployed and whether theyre looking for work or not
cons:
people may not answer honestly and exagerate their situation
people may have different interpretations of what activel seeking work is
people who are woking on temp / part time contracts may be hard to classify as working / employed
Economic costs of unemployment
loss of earnings leading to lower living standards
more difficulty getting into work in the future, may lose skills and become unattractive to future employers
increased government spending to fund benefits
loss of gov tax income
What is the natural rate of unemployment?
the difference between those who would like a job at the current wage rate and those who are willing and able to take a job
What determines the natural rate of unemployment?
Availability of job info
Quality of education / training schemes
Flexibility of the labour market
Monetarists believe that unemployment is due to supply side policies/ The believe demand side employment will only be temporary
What is the changing natural rate of unemployment?
Increased maret flexibilities e.g less powerful unions more self employment
Privatisation has helped increased the competitiveness of industry, leading to more flexible labour markets
Lower wage increases making firms more willing to keep workers
Policies to reduce unemployment
Fiscal and monetary policy (demand side)
education and training
better job information and interview practise
lower benefits and taxes
reducing minimum wage
