In The Know v1.32 Structural Unemployment
“Unemployment resulting from changes in the basic composition of the economy. These changes simultaneously open new positions for trained workers.” – Investopedia
“Joblessness caused not by lack of demand, but by changes in demand patterns or obsolescence of technology, and requiring retraining of workers and large investment in new capital equipment.” – Biz Dictionary
“Economists often describe unemployment as “cyclical” or “structural.” Cyclical unemployment results from broad economic slowdowns: As the economy turns, businesses lay off workers, meaning other businesses suffer, meaning more layoffs. Structural unemployment results from broad economic changes: An economy with a strong apple trade might be becoming an economy with a strong orange trade, and as that transformation happens, a lot of apple workers might be out of a job.” – Washington Independent
As an HR leader, you’d better have an opinion on the question. If this is structural unemployment, you may have a recruiting problem of serious import. If it isn’t, you can just wait for the tide to turn. Here are five links to spark your thinking on the subject.
- Many Americans in Financial Panic Mode
The view from Canada. Last week Stocks rallied and sentiment turned solidly positive because the U.S. lost only 54,000 jobs in August. Roughly 1/6 of all US households are in a financial panic mode. This is becoming the primary vector of job satisfaction, retention and attrition. In spite of their best efforts, companies are beginning to fill with people who are desperate to hold on to their jobs.
- The Coming Structural Unemployment Crisis
From May 2010, the structural unemployment we’re about to face comes from automation. As machine intelligence grows exponentially, the jobs destroyed are replaced by fewer, more capital intensive occupations. Where do the unemployed migrate when even Wal-Mart is reducing staff with automation?
- The Varieties of Unemployment
This is not structural unemployment, this a collapse of demand that can be repaired with proper stimulus. “This may well look like structural unemployment in three years. In three years, we may well see labor shortages, rising wages, and increasing prices in expanding sectors, accompanied by high unemployment elsewhere in the economy.”
- When Long Term Unemployment Becomes Structural
Currently, 6.5 Million US citizens have en unemployed for over six months. In the previous two recessions, the high was 2 Million.
The underlying structure of the labor market is disconcerting. Real growth won’t return until the problem is addressed.
- The Richest Man in the World: A parable about structural unemployment and a basic income
Nice video. Simple and effective.
Are people in your organization making videos like this?
- Bonus Link: A Deeper Kind of Joblessness
Harvard Blogger Umair Hacque updates the notion of structural unemployment. Noting that Henry Ford’s employment premise was that every employee should be able to buy a Ford, he highlights the quality problem in today’s job opportunities. “Ford explicitly said that if he paid his workers above the norm, and gave them more leisure time, not only would he gain greater commitment and dedication, in a industry marked by quick turnover — but, more importantly, he’d also spark more, better demand for novel relatively expensive durable goods, like cars, amongst a still relatively poor middle class.”