Moneyzine
Contents
/Careers Guides/Structural Unemployment

Structural Unemployment

Moneyzine Editor
Author: 
Moneyzine Editor
1 mins
September 26th, 2023
Advertiser Disclosure

Definition

The term structural unemployment refers to an underlying shift in the availability of jobs that make it difficult for some workers to find employment. Structural unemployment can result from a shift in the economy or a mismatch between the job requirements of employers and the experience of workers.

Explanation

Structural unemployment is similar in concept to frictional unemployment; however, structural unemployment is thought to be more permanent. It can occur for a number of reasons, including economic conditions that cause a long term shift in the supply of jobs at a given level of wages. For example, competitive pressure can lead companies to lower the rate of pay offered to employees. While the industry may still be willing to hire new employees, out-of-work individuals are unwilling to accept the lower wages.

Structural unemployment can also result from technological advances. For example, the adoption of online banking and email has reduced the need to send mail through the United States Postal Service. This structural change in the way consumers conduct business will result in a permanent decrease in the need for postal workers and mail sorting. The agricultural industry saw a similar decline in the need for workers, as automation replaced what were traditionally task performed by hand.

The decrease in manufacturing jobs in the United States is another example of structural unemployment. As these jobs moved to countries with lower wages, the demand for the skills these workers possessed permanently declined.

Related Terms

Related Content

Is It Worth Pursuing a Master's Degree?
In an era where education is synonymous with opportunity, many consider pursuing a Master's degree a surefire way to advance their careers. However, is it really the golden ticket to success we've been led to believe?
March 21st, 2024
The gender pay gap, the persistent disparity in average earnings between men and women throughout their careers, serves as a critical measure of wage inequality. This gap underscores the ongoing issue of income disparity, despite the ideal of equal pay for equal work.
March 14th, 2024
7 Essential Financial Moves After Losing Your Job
Navigating the stormy seas of job loss? You're not alone.
February 23rd, 2024
The Most In-Demand Skills to Get Hired in 2024
Every job requires a combination of vital skills, but what skillset is valued most in 2024? As the job market evolves, staying ahead means it’s key to understand and acquire the skills that employers value most.
February 20th, 2024
Key Productivity in the Workplace Statistics for 2024
In 2023, global employee engagement saw a slight uptick, with 23% of employees engaged, up by two percentage points. However, a sizable 59% are categorized as disengaged, while actively disengaged employees, known as "loud quitting," declined to 18%. These figures highlight the persistent challenge for organizations to cultivate happiness and productivity in the workplace.
January 31st, 2024

Contributors

Moneyzine 2024. All Rights Reserved.