Assess the main causes of unemployment

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Assess the main causes of unemployment

Unemployment is described as someone who has been in previous employment but he/she has lost their job due to various factors, which will be assessed within this essay.  Unemployment is not to be confused with workless households – a workless household is one where all occupants choose not to work or physically can’t work because of disability.  Also, the occupants within a workless household would be receiving benefits, such as Income Support.  Unemployment has risen very sharply over the past twenty years for two main reasons.  Partly it is because of technological changes which have caused structural change in the economy and also because of the change in Government policies.  Although structural changes and Government policies are primary factors which have caused unemployment, there are also secondary factors which have added to the rate of unemployment and these are age and education.  Within this essay, all of the above factors and causes of unemployment such as structural change, Government policy, age and education will be assessed.

One of the primary factors which has caused unemployment is structural change, this was when employment shifted between the three business sectors – primary industry, manufacturing and the service sector.  Throughout the 1980s and into the 1990s high unemployment was caused by the closure of heavy industries and also by the high inflation rates which caused businesses either to go out of business or forced them to make cut-downs on employees.  In 1986, unemployment was at an all time peak with 3.3 million people being unemployed and this was because heavy industries were in their final phase of shutdown and many people within these traditional industries became unemployed and had no transferable skills and therefore became the long-term unemployed.  A second primary factor which has caused unemployment is the change in Government policy.  In the 1980s the Government decided to tighten their spending power in order to try and control inflation; so they stopped using their money to maintain industries that didn’t make a profit – this meant, many places closed down – causing more unemployment.  The Government also introduced nationalisation which was when the Government sold shares from their private companies to the public, such as BT and the Water-board.  This process was otherwise known as nationalisation.  In the mid 1980s it looked as though unemployment was decreasing but and economic recession due to the collapse of the pound increased it again.  In 1992, the UK came out of the recession and unemployment began to fall but the structure of the economy had changed radically.

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Another factor as to why people find themselves living below the breadline is due to the low paid jobs many previously unemployed people find and therefore people who are constantly in and out of employment will find it harder to achieve a higher standard of living.  People who are classed as living in workless households have an extremely low income, with Government benefits keeping them afloat.  This group has found themselves in a cycle of low income which they rarely can break free from.  In 1996, only 1% of people returning to the workplace were earning £251-260 per week ...

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