User:Iparr011/Structural unemployment

Causes and examples

From an individual perspective, structural unemployment can be due to:

• Inability to afford or decision not to pursue further education or job training.
• Choice of a field of study which did not produce marketable job skills.
• Inability to afford relocation.
• Inability to relocate due to inability to sell a house (for example due to the collapse of a real estate bubble or of the local economy).
• Decision not to relocate, in order to stay with a spouse, family, friends, etc.

From a larger perspective, there can be a number of reasons for structural unemployment across large numbers of workers:

• Technological obsolescence makes a specific expertise useless. For example, demand for manual typesetters disappeared with digitization of printing plate production.
• Productivity increases reduce the number of workers (with the same or similar skills) needed to satisfy demand.
• New technology significantly increases productivity, but requires a smaller number of higher-skilled workers. For example, fewer agricultural workers are needed when the work is mechanized; those that remain must be trained to operate equipment. Another common example is the use of industrial robots to automate manufacturing. A study by Carl Benedikt Frey and Michael Osborne found in 2013 that almost half of U.S jobs are at risk of automation.
• Competition causes the same jobs to move to a different location, and workers do not or cannot follow. Examples:
  • Manufacturing jobs in the United States moved from what are now called Rust Belt cities to lower-cost cities in the South and rural areas.
  • Globalization has caused many manufacturing jobs to move from high-wage to low-wage countries.
  • Free trade agreements can cause jobs to move as competitive advantage changes.
• Political changes, for example the collapse of the Soviet Union.

• Large-scale changes in the economy can be particularly challenging. For example, if a large company is the only employer in a given industry for a certain city, when it closes workers will have no competing company to move to, and the local education system and government will be burdened with many people who need job re-training all at once (possibly at the same time the local economy fails to create new jobs due to decreased overall demand).
• Employers may also reject workers for reasons unrelated to skills or geography, so for example structural unemployment can also result from discrimination.
• While temporary changes in overall demand for labor cause cyclical unemployment, structural unemployment can be caused by temporary changes in demand from different industries. For example, seasonal unemployment often affects farm workers after harvesting is complete, and workers in resort towns after the tourist season ends. The dot-com bubble caused a temporary spike in demand for information technology workers, which was suddenly reversed in 2000–2001.
• Structural unemployment is often associated with workers being unable to shift from industry to industry, but it can also happen within industries as technology changes the nature of work within a given field. This is a driver of skills gaps as technology and globalization "hollow out" many middle-skill jobs, positions that traditionally have not required a college degree.
• Education systems have not kept pace with technology advancements in the workforce. In the case of the United States, it is suggested that the country’s skill gap is a result of the economy becoming increasingly supported by STEM-oriented jobs and industries, an area the U.S. is ill-prepared to face compared to other nations: the country suffers from a severe lack of STEM access, where students fail to receive the courses necessary to develop the critical skills that will allow them to secure a position, something that is further enhanced by a perpetual shortage of instructors as a large percentage of STEM majors refuse to act as teachers.
• A lack of effort to bridge skill gaps by employers. Only 59% of employers will invest in professional training and development for their employees, and only 21% of workers say they have acquired new skills through formal, company-provided training. Employees take it upon themselves to develop their own skills, while employers fail to guide them on which skills they should develop.