The structural unemployment it is a type of long-term unemployment that has multiple causes, such as the inability of companies to provide jobs that match the skills of people who are unemployed.
For example, suppose there are major technological advances for industries throughout the economy. Companies will need to hire workers with technical skills, such as programming and math skills, in order to continue their growth..
People without technical skills can be marginalized, experiencing structural unemployment, because there is a mismatch between jobs in the market and workers.
Jobs are available, but there is a big discrepancy between what companies need and what workers can offer.
Structural unemployment occurs even in periods of strong economic growth. It is a form of unemployment on the supply side, and not due to insufficient aggregate demand.
Policies to reduce structural unemployment include recycling and geographic subsidies. Fiscal or monetary policy to boost demand will be ineffective in solving structural unemployment.
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This type of unemployment occurs when a profound change in the economy makes it difficult for some groups of people to find work. It is more difficult to correct than other types of unemployment.
Structural unemployment is caused by forces other than the business cycle. This means that structural unemployment can last for decades and radical change may be needed to correct the situation..
If structural unemployment is not addressed, it can increase the unemployment rate long after a recession ends. If ignored by policy makers, it creates a higher natural unemployment rate.
For example, hundreds of thousands of high-paying manufacturing jobs have been lost in the United States over the past three decades because these production jobs have migrated to lower-cost areas, such as China and elsewhere..
This decrease in the number of jobs creates a higher natural rate of unemployment. Increasing technology in all areas of life increases future structural unemployment, as workers without the right skills will be marginalized.
Even skilled workers can face futility, given the high rate of technological obsolescence..
Structural unemployment is caused by fundamental changes in the economy, and is exacerbated by external factors such as improved technology, government policies, and the lack of necessary job skills of workers, making it difficult for workers to find employment..
Among the causes of structural unemployment is technological advance in any industry. This has been happening more frequently in manufacturing. Robots have been continuously replacing unskilled workers.
These workers must be trained as computer operators if they want to continue working in the same industry. They must learn how to handle the robots that are doing the work that they used to do before..
Another cause is trade agreements, such as the North American Free Trade Agreement. When NAFTA first lifted trade restrictions, many factories moved to Mexico.
They left their employees without a place to work. The deal proved to be one of the underlying causes of unemployment in the United States.
This occurs when workers are unable to move from areas of high unemployment to areas with a shortage of labor. This could occur due to difficulties in buying / renting a home.
Workers live too far away from regions where jobs are available, and sadly cannot get close.
This occurs after changes in the economy, which lead to a change in the demand for skilled labor.
For example, if there is a closure of manufacturing companies, workers with skills for these types of jobs may find it difficult to relocate to new industries where very different skills are required. For example, IT skills, teaching, accounting.
It takes time for people to retrain and older workers may feel that it is too difficult.
While the global recession of 2008-2009 caused cyclical unemployment, it also increased structural unemployment in the United States. As the unemployment rate peaked at more than 10%, the average unemployment period for millions of workers increased significantly..
The skills of these workers deteriorated during that prolonged time of unemployment, causing structural unemployment..
The depressed housing market also affected the job prospects of the unemployed and thus increased structural unemployment.
Relocating to a new job in another city meant selling the houses at a substantial loss, something not many were willing to do, creating a mismatch of skills and job availability..
France has been hit hard by structural unemployment. The country has faced recessions due to natural disasters and strike movements that are holding up the economic recovery.
Structural unemployment arises from the fact that a large part of France's workforce is participating in second-level temporary jobs, with little chance of being promoted to long-term contracts, forcing the strike.
This results in a lack of flexibility and little job mobility, leaving out many French workers who have not adapted to new tasks and skills. Unions and the French government are negotiating to help curb structural unemployment.
Technological advances have created structural stoppages in the newspaper industry. Advertisers have turned away from newspaper advertisements to web-based advertising.
Online news media found on the Internet have turned customers away from paper newspapers. Different newspaper employees, such as printers, journalists and delivery route workers, had to be fired.
His skills were based on the different methods of distribution of the newspaper news. Therefore, they had to receive new training before qualifying for a job in the same field..
Farmers in emerging market economies are another example of structural unemployment. Free trade allowed global food corporations to access their markets.
This put small farmers out of business. They couldn't compete with the lower prices of global companies. As a result, they headed to the cities in search of work. This structural unemployment existed until they were retrained, perhaps in a factory job.
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