3.2 - Low Unemployment 0.0 / 5 ? EconomicsEmployment and UnemploymentEconomic objectives and the role of the governmentGCSEOCR Created by: emma_v17Created on: 03-06-18 09:29 Employment and Unemployment Employment - the use of labour in the economy Unemployment - when workers able and willing to work at the current wage rate are unable to find employment 1 of 5 Measuring Unemployment Claimant Count - a way of measuring unemployment according to the number of people claiming unemployment-related benefits unemployment rate = number of unemployed x 100 workforce 2 of 5 Causes of Unemployment Frictinal unemployment - caused by time lags when workers move between jobs Seasonal unemployment - caused by a fall in demand during a particular season Structural unemployment - caused by a permanent decline of an industry Cyclical unemployment - cuased by lack of demand in the economy 3 of 5 Benefits of Unemployment Frictional unemployment allows movement between industries High unemployment keeps down wage rates (benefit to firms) bc more competition Wage rates down -> costs lower - firms more competetive 4 of 5 Costs of Unemployment Lower living standards Loss of status and self-esteem Workers become unemployable Taxes rise Labour resources wasted Leads to more unemployment (cyclical) - RECESSION Budget deficit Higher in specific areas - 'depressed areas' 5 of 5
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