| What is Full Employment? | -This is when Everyone of Working Age [No Students, 65+..] who wants to Work can find Employment at the Current Wage Rates
-This doesn't mean everyone has a Job. People can be Between Jobs [Job Sharing] |
| Why go Governments aim for Full Employment? | -Full Employment will Maximise Production and Raise the Standards of Living in the Nation.
-Unemployment in the Nation therefore means the Economy will not be on the PPF, but rather Inside it. |
| What is Under-employment and why may it be an Issue? | -Under-employment is when a Person has a Job, but it doesn't really Match them - Not taking their Skills, Experience or Availability for the Best Effect. This still means the Economy isn't at Full Capacity.
-This can even be said about People who want Full Time Contracts and not Part Time Contracts |
| How is Labour and Consumer's Demand for Goods linked? | -When Demand is Low [Negative Economic Growth] then Unemployment will Rise
-Demand being High means Unemployment will Fall |
| What is Cyclical Unemployment? [Demand-deficient Unemployment]
-Could it lead to a Doom Loop? | -This usually occurs when the Economy is in Recession, or a Negative Output Gap. This can affect Any Industry
-When AD falls, Unemployment will Rise. This is because Firms will have to Lay off Workers as Profits are Tanking
-This may lead to a Doom Loop as People losing their Jobs leads to Further less Consumption, leading to more Job losses..
-But at the same time it depends how long the Economy takes to Recover. If its a Short Recession, then it won't have enough Time to Develop |
| What is Seasonal Unemployment? | -This is when Demand for Workers in some Industries will not be Consistent Yearly. Tourism and Farming are 2 Key Examples where they have 'Peak Seasons' and just Slumps. Retailing is another |
| What is Structural Unemployment?
-Can it lead to the Negative Multiplier Effect? | -This is when a Certain Industry or Job has a Decline. This can be due to Changes in Consumers Needs, Technology or Cheaper Alternatives.
-Traditional Manufacturing Regions [Shipbuilding in Liverpool] is usually Badly affected by this
-Unemployment in Liverpool therefore means Less Spending, which can cause more Unemployment and Less Government Revenue |
| What are the 2 Types of Immobility posed on Labour? | -Occupational: When Jobs decline overtime, and Workers in that Profession don't have the Skills to do the jobs that are Available [Transferable Skills]
-Geographical: When Worker's unable to Move with a High Unemployment to go to another Region. This can be due to Economic, Social or other reasons. |
| Why may Structural Unemployment become more Common in the Future? | -Technological Change in Products and Production Methods is Rapidly Increasing. Out of Date Industries will be Hit Harder, and less Workers needed to make Products
-Consumer Spending will keep Changing as, due to the Internet, are better Informed making them able to Switch to Lower, Better Quantity Goods |
| What is Frictional Unemployment? | -This is Unemployment that Workers face when Leaving 1 Job and Starting another
-This happens even at Full Employment level as well Employees may want to Leave. That is Natural |
| What factors Influence how long Frictional Unemployment is? | -During a Boom, Vacancies is Higher - Easier to find a Job.
-During a Slump, the Opposite happens
-Juicy Welfare Benefits means People may not Look for a New Job, or can take their Time in finding a New Job
-Information Provision can mean People know, or won't know, the Type and Quality Jobs out there
-Occupational and Geographical Immobility |
| What is Real Wage Unemployment? Use a Supply and Demand Diagram | -This is when Real Wages are Pushed ABOVE the Equilibrium Level of Employment [Supply = Demand] This is due to Trade Unions wanting Higher Wages, or the National Minimal Wage [NMW]
-NMW above the Equilibrium Wage [Minimal Price] means there will be a Excess in Supply, and thus Unemployment between the Amount Supplied and Amount Demanded |
| What can Help Real Wage Unemployment? | -Productivity Rising, or Consumer Spending going up [Anything that Increases the Demand for Labour] will mean the Demand Curve will shift to the Right
-This means the Unemployment size will Decrease |
| Overall, what are the Costs and Consequences of Unemployment? | -Unemployed have Lower Incomes. This reduces Demand [AD] and Firms Profits [Negative Multiplier Effect]
-Less Income Tax for Governments [Budget Deficit] and Less Consumption means less Indirect Tax [VAT] Government spends more on Unemployment Benefits
-Areas with High Unemployment leads to Crime and Health Problems [Negative Externality]
-Workers who have Lacked a job for a Long time means their will probably Never find a Job as they have little, Outdated Skills |
