Those keen to study economics must have noticed economists using structural unemployment quite often, in reference to the discrepancy between the needs and requirements of the employers and the proficiencies of the personnel. Even though the number of job vacancies may be greater than the number of unemployed individuals, it is not possible for them to own the required skills for the jobs that are available for them. One good example of structural unemployment would be sports institutions. If they were to coach a huge number of basketball players than could get positions for playing, the likeliness of them to get jobs in other fields rises. However, while other fields call for their own set of rules and skills, many of them might not be able to get jobs at all. This makes up for an easy, all-inclusive structural unemployment example. But what is structural unemployment’s key cause? While there are a number of questions surrounding the term, let’s get acquainted with the causes of structural unemployment in the first place, and attempt to answer all the questions.
Causes of Structural Unemployment
Some degree of mismatch between the labor force anatomy, mainly in terms of specialization, location, skills, etc. and the demand of the labor is possible in many cases. Even though, many a time, labor may adjust to the requisites of the economy, US economy for instance, however, consuming a lot of time and energy. This is the phase when he is structurally unemployed.
There are a number of ways by which economic life, generically, and the labor market interact in their own structured manner, for example, by public institutions, with the help of a regulatory framework, and by real and actual usage. One of the prime causes of unemployment that is structured is a result of failure of labor market organizations in defining pay-scale bargaining methods and approaches. What’s more, the persistent change in requirements, resources, and technology within the market economies leads to increased number of jobs in a single sector, while reducing the same in the other. As a result, it is not always possible for workers to shift from where jobs are reducing to places where jobs are available in surplus. The ones structurally unemployed do not take up jobs for long, and hence, it becomes all the more difficult for them to be a part of secure employment.