Unemployment

Unemployment

Definition: when you're out of work but actively seeking employment. 

Current level (as correct in April 2013)=7.9% 

No target rate for unemployment. 

Types of unemployment:

Cyclical-dependant on the booms and busts of the economy. 

Frictional-the time between finishing one job and starting another. 

Seasonal-dependant on seasons/time of year. 

Structural-changes in the market alter the demand for labour. 

Measuring unemployment:

Claimant count-unemployment level based on the number of people reciveing Job Seekers Allowance.

-measured every 2 weeks 

-have to be actively seeking work and able to work immediatley. 

Labour Force Survey-unemployment rate based on the potentially economically active population.

-measured every quarter. 

Economic costs:

-May not be able to pay mortgage/bills

-Underutilisation of a scarce resource

Decreased spending/comsumption due to less avaliable income

-Cost to businesses

Political costs:

-Increased spending on benefits and less income tax and VAT means a bigger government deficit

-Popularity of government decreases

Social costs:

-Depression/other health problems which increases the cost to the NHS

-Crime rate rises

-Motivation to find a job decreases so they may never go back to…