Structural unemployment

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Structural unemployment is long-term and chronic unemployment arising from imbalances between the skills and other characteristics of workers in the market and the needs of employers.^[1] It involves a mismatch between workers looking for jobs and the vacancies available often despite the number of vacancies being similar to the number of unemployed people. In this case, the unemployed workers lack the specific skills required for the jobs, or are located in a different geographical region to the vacant jobs. Structural unemployment is usually a result of structural change. The government can mitigate the problem by providing an infrastructure that offers training in these areas so that the demand for these jobs can be met. For example, the USA provides community colleges so that more people can have the opportunity to increase their skills, which in turn increases the supply of labor in skilled areas.

Structural unemployment is one of the five major categories of unemployment distinguished by economists. Structural unemployment is considered to be one of the "permanent" types of unemployment, where improvement is possible only in the long run.

One of the explanations behind structural unemployment came from Austrian and French Marxist social philosopher, André Gorz. He argues that it could be permanent in modern society. He therefore argues that a basic income could be a solution, and as he explains: "The connection between more and better has been broken; our needs for many products and services are already more than adequately met, and many of our as-yet- unsatisfied needs will be met not by producing more, but by producing differently, producing other things, or even producing less. This is especially true as regards our needs for air, water, space, silence, beauty, time and human contact...

"From the point where it takes only 1,000 hours per year or 20,000 to 30,000 hours per lifetime to create an amount of wealth equal to or greater than the amount we create at the present time in 1,600 hours per year or 40,000 to 50,000 hours in a working life, we must all be able to obtain a real income equal to or higher than our current salaries in exchange for a greatly reduced quantity of work...

"Neither is it true any longer that the more each individual works, the better off everyone will be. The present crisis has stimulated technological change of an unprecedented scale and speed: `the micro chip revolution'. The object and indeed the effect of this revolution has been to make rapidly increasing savings in labour, in the industrial, administrative and service sectors. Increasing production is secured in these sectors by decreasing amounts of labour. As a result, the social process of production no longer needs everyone to work in it on a full-time basis. The work ethic ceases to be viable in such a situation and workbased society is thrown into crisis" André Gorz, Critique of Economic Reason, Gallilé,1989

[edit] Causes

Structural unemployment is caused by a mismatch between jobs offered by employers and potential workers. This may pertain to geographical location, skills, and many other factors. For example, in the late 1990s there was a tech bubble, creating demand for computer specialists. In 2000-2001 this bubble collapsed. A housing bubble soon formed, creating demand for real estate workers, and many computer workers had to retrain to find employment.

[edit] Automation

Marshall Brain, a Fellow in the IEET think-tank, spoke on his projections of widespread structural unemployment as a result of automation,^[2] and the need for a basic income guarantee, at the Singularity Summit in San Jose, CA on October 25th, 2008.