2.1.3 Unemployment (Macro)

UNEMPLOYED

Individuals who are not currently employed but are actively seeking and available for work.

LONG TERM UNEMPLOYED

Unemployed for more than 12 months.

UNDER EMPLOYED

Occurs when individuals are employed but their job des not fully utilize their skills and qualification. This can result in part-time work, low wages, or jobs below their skill level.

FICTIONALLY UNEMPLOYED

Someone who is unemployed and between jobs.

THE ILO (Labour Force Survey)

The Labour Force Survey (LFS) is a large UK survey used to collect data on employment, unemployment, and economic inactivity, based on ILO definitions. It asks people about their work status, hours worked, and job search activity. The survey interviews, via call around 90,000 people.

ILO ADVANTAGES

Its more accurate/ non-biased, as it picks up everyone that is unemployed, unlike the JSA that just takes into account unemployed that are eligible for JSA and universal credit, so not everyone is counted.

Data is updated regularly, so it reflects recent unemployment rates.

ILO DISADVANTAGES

Sometimes you cant get a hold of people of the phone, to fill a survey out.

Smaller sampling size as it only records 90,000 people out of the millions living in the UK, so not fully representative of the entire workforce.

The Labour Force Survey for unemployement take a while to gain all the data, therefore it may not be accurate.

Undocumented working migrants arent taken into account.

Could be sampling errosrs.

CLAIMONT COUNT

Is the total number of recipients of Job Seekers Allowance in order to calculate the rate of unemployment. In order to get job seekers allowance you need to prove you re actively looking for jobs.

CLAIMONT COUNT ADVANTAGES

Larger Sampling size, as you claim JSA from job centres, and there are job centres in every town in the UK. Therefore you can get a much better picture of regional unemployement, so more representative or unemployment rates.

Its more up to date data, as people claim JSA weekly, whereas ILO data may be old as it takes ages to gain info.

CLAIMONT COUNT DISADVANTAGES

Not everyone is eligible for JSA, so it doesn't take into account everyone that is unemployed, so not fully representative.

You will always get a lower count for JSA then ILO as not all unemployed will be able to claim JSA, or be bothered enough to claim JSA.

WHAT CAN THE NATIONAL RATE OF UNEMPLOYMENT HIDE

1. Regional variations

2. Local Variations

3. Variations in unemployment by age, gender, ethnicity and other social backgrounds.

4. It doesn't tell us how long people have been out of work.

PROBLEMS WITH UNEMPLOYMENT

Your skills may start to decrease, not as useful to the work force in the future

Your not being as economically beneficial, as being unemployed means you have less disposable income, therefore less consumer spending

Lower Tax revenue

Higher government spending on benefits

Negative effects on mental and physical health

WHY THERE IS YOUTH UNEMPLOYMENT (16-24)

Lack of experience: Young people may have fewer work experiences making it harder for them to find jobs. (They have weaker human capital)

Lack of education or training: Some young people may not have the skills or qualifications needed for the jobs available.

Age discrimination: Employers may be less likely to hire young people, who are perceived as being less reliable or motivated than older workers.

Economic downturns: When the economy is struggling, young people are often the first to be laid off or have their hours reduced.

Automation and technological advancements: As technology advances, jobs are being replaced by machines, especially retail.

POSITIVES OF EMPLOYMENT

People have more disposable income (income after tax and benefits), therefore increase in consumerism, as they have more money to spend on goods and services. People spending more money on goods and services means business grow and the economy increases via VAT.

Government spend less on welfare benefits such as Job Seekers Allowance as more people are employed, and governement earn more money through taxes. Government can then reinvest this money back into social services to better the country.

Increase in tax revenue, therefore government have more money to invest into social services that can better the country.

Increase in living standards, as people have a stable income.

NEGATIVES OF EMPLOYMENT

People spending more on goods and products, will cause the prices of them to increase, making them unaffordable to some and even worse cause an increase in inflation rates.

 Inequality as people may be employed based on superficial reasonings such as sex and race.

EFFECTS OF UNEMPLOYMENT

Reduced income, as you dont have wages, therefore are left with less disposable income. Left to search for other modes of income, for example savings.

Can cause mental health and physical health problems such as depression, anxiety, headaches, stress and back aches. Have lower mental health compared to individuals who are working.

People who are unemployed are often left with no health care or no health insurance, as jobs and businesses pay for your health insurance.

Family member at risk for the negative factors of unemployement, causes and increase in family disputes, and can effect spouses well being.

Higher poverty rates, poorer quality housing and limited access to public transport

Decrease in consumerism, as unemployed individuals have less disposable income to spends on goods and products. Therefore they contribute less money to the economy in relation to goods produced. Less money contribution can lead to businesses and shops closing down as companies arent owning as much revenue.

GIG ECONOMY

The gig economy is a wok arrangement where people perform short-term, flexible, and often freelance work, typically through online platform or apps. Instead of full time traditional jobs, people in the gig economy often work on a project-by-project basis, sometimes for multiple clients.