Structural Unemployment
We have a lot of jokes about unemployed people, but none of them work.
Badump.
If you didn’t get that, then don’t bother seeking employment as a comedy writer; your skills just don’t match what’s in demand from the comedy industry! In fact, if you were to seek a job in comedy you would probably find yourself structurally unemployed.
Structural unemployment arises when the skills of those seeking jobs do not align with the skills of those seeking workers. In other words, there is a mismatch between what employers demand and what individuals who are actively seeking jobs are able to supply. Structural unemployment has three main causes:
1. Changes in technology lead to the obsolescence of certain skills. For example, as driverless cars become more ubiquitous, Uber and Lyft drivers will become obsolete and could experience structural unemployment.
2. Improvements in productivity mean fewer workers are needed in the production process. For example, those same self-driving cars will will someday be manufactured and assembled by nearly autonomous robots, so workers who were previously employed in auto plants will find themselves structurally unemployed.
3. Globalization leads to the outsourcing and offshoring of jobs. For example, the robots making those self-driving cars are likely cheaper to operate if they’re located in China, so their operators (and the janitors who kept the factory floor clean) may find themselves structurally unemployed when the factory shuts down and moves to China.
Pretty depressing, huh? Based on this, should we assume that everyone will someday be structurally unemployed? Of course not! To reduce structural unemployment, society should focus on investing in human capital in ways that assure young people entering the labor force are equipped with skills that will be in demand by tomorrow’s employers, not by those of the past!
What this means for you is that you should consider switching your major from “horseshoe design” to computer science or nursing or finance asap. We hate to tell you, but horseshoes just ain’t a growth industry.