Unemployment. There are two ways that the total number of unemployed can be worked out, but both can be a little unreliable: A claimant count A Labour Force Survey

Unemployment: Can be defined as the number of people (of working age) who are willing and available to work at current wage rates, but not currently employed. This is a relatively straightforward definition but working out how many people this is in practice is much more difficult. There are two ways that the total number of unemployed can be worked out, but both can be a little unreliable:

A claimant count
A Labour Force Survey

The first of these two was the method that was used for the whole of the 1980s and most of the 1990s. It simply involves taking a count of the number of people unemployed and claiming benefit. However, this method has many imperfections and so the incoming Labour government in 1997 changed to the second method of calculating unemployment. The Labour Force Survey is the current method.

Unemployment can be measured either as the number of people in '000s or millions and this is the most quoted figure. However, to give us an idea of how significant this number is, we often calculate how many people this is as a percentage of the labour force.

Now talk about Articles from the economist:

Key ‘Positive’ quotes from the article:

Since Labour returned to office, the number of employed people at work has risen to 27.4m, a record high
The proportion of the workforce claiming the dole, 4.2%, is lowest since ...

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Now talk about Articles from the economist:

Key ‘Positive’ quotes from the article:

Since Labour returned to office, the number of employed people at work has risen to 27.4m, a record high
The proportion of the workforce claiming the dole, 4.2%, is lowest since Feb 1980
The proportion who are ‘ILO unemployed’ (those looking for work) is 5.9% lowest since record began in 1984.

Key ‘Negative’ quotes from the article:

Although the number in work is higher then ever, the proportion is lower than at its peak in 1990
Inactivity is higher – by 2%
Men have become more likely to be out of the labour Market

B) Involuntary unemployment: When a worker would be willing to accept a job at the going wage but cannot get an offer

Talk about how this is in contrast to Classical theories on Unemployment, and then lead to more modern ones:

C) Cyclical or Demand-deficient unemployment: Unemployment caused by a low level of aggregate demand associated with recession in the business cycle. Demand-deficient unemployment occurs when there is not enough demand to employ all those who want to work. It is a type that Keynesian economists focus on particularly, as they believe it happens when there is a disequilibrium in the economy.

The term Cyclical is used because it will vary with the trade cycle. When the economy is booming, there will be lots of demand and so firms will be employing large numbers of workers. Demand-deficient unemployment will at this stage of the cycle be fairly low. If the economy slows down, then demand will begin to fall. When this happens firms will begin to lay workers off as they do not need to produce so much. Demand-deficient unemployment rises. The behaviour of demand-deficient unemployment will exactly mirror the trade cycle.

Structural unemployment: Long-term joblessness caused by shifts in the economy. Often structural unemployment occurs because of changes in technology.

Structural unemployment occurs when the structure of industry changes. As an economy develops over time the type of industries may well change. This may be because people's tastes have changed or it may be because technology has moved on and the product or service is no longer in demand. In the UK many industries that were once major employers have now all but disappeared. Shipbuilding and mining are prime examples of this sort of trend, but there are also many more minor examples as well. The extent of structural unemployment will depend on various things:

mobility of labour - if people are able to quickly switch jobs from a declining industry to a rapidly growing one, then there will be less structural unemployment.
the pace of change in the economy - the faster the changes taking place in people's tastes and demand and supply, the more structural unemployment there may be as industry has to adapt more quickly to change.
the regional structure of industry - if industries that are dying are heavily concentrated in one area, then this may make it much more difficult for people to find new jobs. Both the shipbuilding and mining industries were heavily concentrated and some areas have taken many years to adapt and reduce the level of structural unemployment.

Source: ONS, Blue Book, 1997