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Unemployment Working Population a) Structure of the working population UK population is divided into two sections: (i) The working population is made up of the groups ( Employed, Self-employed and registered unemployed), All those people employed or self employed make up the labour force. (ii) Dependants make up the groups ( Students and housewives, Children and retired) Measurement of Unemployment When calculating the level of unemployment the government only counts those people who register as unemployed and claim benefit. A large number of people seeking work either do not register or do not claim benefit and are now excluded from official figures. The unemployment rare is the percentage of the labour force officially jobless. Full employment occurs when the number of notified job vacancies exceeds the number of registered unemployed, Cost of Unemployment a) Lost output ‘The opportunity cost of each unemployed person is their forgone output. If the average annual output per worker is AUD12000, unemployment of 3 % million costs Australia AUD 40 billion a year in lost goods. b) Increased benefit payments Each extra person who become unemployed stop paying tax (AUD 2500) and starts receiving benefits (AUD 3000). The government had to raise an extra AUD 15 billion to finance unemployment benefits. c) Human costs of unemployment ‘The long-term and youth unemployed feel increasingly isolated and removed (alienated from society). ‘Types, Causes and Remedies for Unemployment Type Description Cause Remedy Frictional Workers temporarily between jobs Delays in applying interviewing Improving job information, And accepting jobs e.g computerized job centre Structural Workers have the wrong skills in Declining industries and the Subsidies and improve the the wrong place immobility of labour mobility of labour Cyclical All firms need fewer Low total demand in the Increased government Economy spending or lower taxes Technological Firms replace workers with machines Automation and information Retraining technology Regional High unemployment in one area Local concentration of declining Regional aids, e.g relocation Industries grants Seasonal Unemployment for part of the year Seasonal variation in demand Retraining,