Structural unemployment happens when workers' skills don't match what employers are looking for. This can happen because of new technology or changes in the economy. Here are some long-term effects of structural unemployment on jobs:
Less People in the Workforce: When people are out of work for a long time, they might stop looking for jobs altogether. In the UK, the number of people working dropped from 63% in 2010 to about 61% in 2020 because of high structural unemployment.
Loss of Skills: If someone is unemployed for a long time, they might forget how to do their job. A study showed that workers who are unemployed for over six months can lose up to 30% of their skills.
Wider Income Gap: Structural unemployment often hits lower-skilled workers hardest, making rich and poor people’s earnings more unequal. A report showed that the income for the bottom 20% of earners dropped by 5% over the last ten years.
Different Unemployment Rates by Area: Some places that rely on industries that are going down may have high unemployment rates that stick around. For example, the North East of England had an unemployment rate of 9.9% in 2016, much higher than the national average of 4.6%.
Need for New Programs: To help fix these problems, governments might need to spend money on retraining and skill-building programs. In the UK, the government invests about £2.5 billion each year to help people learn new skills and find jobs.
Structural unemployment happens when workers' skills don't match what employers are looking for. This can happen because of new technology or changes in the economy. Here are some long-term effects of structural unemployment on jobs:
Less People in the Workforce: When people are out of work for a long time, they might stop looking for jobs altogether. In the UK, the number of people working dropped from 63% in 2010 to about 61% in 2020 because of high structural unemployment.
Loss of Skills: If someone is unemployed for a long time, they might forget how to do their job. A study showed that workers who are unemployed for over six months can lose up to 30% of their skills.
Wider Income Gap: Structural unemployment often hits lower-skilled workers hardest, making rich and poor people’s earnings more unequal. A report showed that the income for the bottom 20% of earners dropped by 5% over the last ten years.
Different Unemployment Rates by Area: Some places that rely on industries that are going down may have high unemployment rates that stick around. For example, the North East of England had an unemployment rate of 9.9% in 2016, much higher than the national average of 4.6%.
Need for New Programs: To help fix these problems, governments might need to spend money on retraining and skill-building programs. In the UK, the government invests about £2.5 billion each year to help people learn new skills and find jobs.