Define workforce
A measure of people of working age who are willing and able to work
Define unemployed
Someone who is willing and able to work but is not currently in employment
What are the measures of unemployment?
1 - claimant count = Measuring unemployment using number of people claiming JSA
- Not everyone who is eligible claims it, governments prefer (shows smaller %), and some people may be denied therefore not included
2 - Labour force survey = Measure of unemployment of those out of work in the last 4 weeks and ready to start in the next 2 weeks
- More representative, but data is 6 weeks old, ILO (international labour organisation)
Define underemployment
A situation in which a worker is employed but wants to work more (zero hour contracts)
Factors affecting employment
- Compulsory age to be in education/training = more skilled and employable in long run
- Number of studens going to uni likely to fall as fees rise
- Level of net migration = will change size of workforce
- Availability of jobs = state of economy
- Level of taxes/benefits
Define real wage unemployment
People who are willable and able to work but not at the given wage rate
Define demand-deficient unemployment
Unemployment caused by a lack of AD in the economy (such as in a recession) = cyclical unemployment
Reasons for demand-deficient unemployment
- Lack of business confidence
- Increase in value of currency (import more and export less SPICED)
- Slow rates of productivity growth relative to other countries (less FDI)
- External shocks such as rise in oil prices
- Increase use of imports from low-wage economies
Define structural unemployment
A measure of workers who lose jobs in a declining industry and do not have the skills to join other industries
Define frictional unemployment
A measure of people who are between jobs
Define seasonal unemployment
A measure of people who only have jobs at certain times of the year
What are the effects of unemployment?
- Consumers = lower incomes and lower SoL
- Firms = must lower prices so profits lower
- Workers = skills ‘out of date’ in long run
- Government = JSA increase and decrease tax revenues