| What does Economically Inactive mean? | -These are People who are not Working AND not Looking for Work
-Economists see them as a Waste of a Scarce Resource, which seems Brutally Harsh |
| Why are People Economically Inactive? | -Care for the Sick, Elderly or Young People (UNPAID)
-In Full Time Education - School or University
-Long Term Illness or Disability
-Choosing not to Find a Job or Given Up |
| Why are there Economic Benefits for People to be Economically Inactive? | -People looking after Family Members can Save the Government from Spending Benefits.
-People in Full Time Education leads to Higher Human Capital in the Labour Force, increasing the Range and Quality of Skills |
| What occurs when Imperfect Information exists in a Labour Market? | -Perfect Information refers to Workers knowing Everything about Every Job and Employers knew Everything of every Potential Worker. This obviously is not the Real World so
-Many Workers end in Jobs that are not the Best Fit for them, which may not be paid Enough for them. Or have no Job at all
-Employers have Workers that are not as Productive as they could be, leading to a less Competitive Firm |
| What effect does Skill Shortages do to the Economy? How to Respond to this? | -A Shortage of anything leads to an Increase in its Price. Shortages of Skilled Labour leads to Higher Wage Costs for Firms, meaning Higher Costs of Production
-Shortages make Firms forced to Employ Workers who may not be suitable for such a Role
-Training can Increase the Skills of Employees, but they are Scared in case another Firm just Steal the Person
-Encouraging Immigrants with the Skills needed is also another Strategy |
| Why is some Unemployment okay, but Lots of Unemployment Bad? | -Some Unemployment, or really Any, means the Economy is not making use of its Resources Effectively. But it also keeps the Wage Rate Down
-If Everyone had a Job and an Employer wanted to Hire a Worker, it would be Expensive
-Unemployment becomes Serious and Determinantal when its Long Term and is too High
-If the Unemployment Benefit is too High (JSA) then People may Actively not Seek for Work and Claim Benefits than Working for a Low Wage. This is an Unemployment Trap |
| Why may Workers be Geographical Immobile? | -People making Friends, and having Family they don't want to move away from
-Expensive to Move House. To also Sell your House too.
-Regional Differences. Going from Cornwall to London is quite the Difference |
| Why may Workers be Occupational Immobile? | -In an Ideal World, Workers could have Transferrable Skills which means they are Good for a Number of Jobs
-But Usually, that is not the Case. There are Specific Skills which may be going out of Fashion
-Age also is a Factor. Younger Workers will be more Likely to Retrain than Older Workers
-Some Jobs need High Level Qualifications and Personality Traits. This can make some Jobs Niche |
