gcse economics - the big picture: unemployment - introduction
Those people able to work who are without a job
HOW IS THE NUMBER OF UNEMPLOYED MEASURED?
CURRENT MEASURE (ILO SURVEY)
Those people willing and able to work, who are without a job. It does not matter whether they are claiming or eligible for unemployment benefit.
OLD MEASURE (CLAIMANT COUNT)
Those people willing and able to work and are without a job. They must also be eligible to claim benefits and choosing to claim benefits.
PROBLEMS / COSTS OF UNEMPLOYMENT
INDIVIDUAL |
OTHER WORKERS |
Loss of earnings |
May have to pay extra tax to cover increased unemployment
benefits |
Lack of self esteem |
Loss of job security – they may fear losing
their jobs. |
Reduced spending power |
May have to accept pay cuts to keep their jobs |
Loss of skills and employabilty (human capital) |
|
GOVERNMENT |
LOCAL AREAS / ECONOMY |
May become unpopular |
Less spending by individuals |
Will collect less money in income tax and VAT |
Businesses may suffer because of the fall in demand |
More money to pay out on benefits |
Crime may increase |
Will have less money to spend on education and health |
The area /country is not using its resources effectively
and may become less competitive |
ACTION
a. Which measure of unemployment would you expect to be higher and why?
b. Which measure of unemployment do you agree with?
c. If the Gov’t has to pay out unemployment benefit. Why does this
cause an opportunity cost?
SMART
THINKING
d. What is human capital and why is it important to a) the individual b) employers?
These GCSE Economics revision notes have been kindly provided by Peter Davies of Mill Hill School, Ripley Keep Up-todate with your GCSE Economics - Subscribe Free to Economics in the News by Email
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