Employment & Labour Force
Which two groups make up the labour force?
Employed people and unemployed people
What is unemployment?
Unemployment means people are willing and able to work but cannot find a job
A fruit picker loses work after the harvest season ends.
Seasonal unemployment
What is the peak and trough?
The peak is the highest point of economic growth before the economy starts to slow down.
The trough is the lowest point of the business cycle before the economy starts to recover
One positive impact of economic growth on individuals.
More jobs, higher incomes, better services, or improved standard of living.
What is employment?
People who have a job (part-time and contract job)
Does every person without a job count as unemployed?
No. They must be actively looking for work and available to work
A construction company lays off workers because the economy is in recession and fewer people are building houses.
Cyclical unemployment
What is an expansion and a recession
An expansion is when the economy is growing, production increases, employment rises and spending improves.
A recession is when economic activity falls, businesses may earn less revenue, unemployment may rise and living standards may fall.
Two positive impact of economic growth on businesses
Higher sales, higher profits, more investment opportunities, or business expansion
Why is employment important for society?
Employment helps the economy by increasing production, income, spending and tax revenue
One negative impact of unemployment on individuals
Lower income, stress, lower confidence, difficulty paying bills, or reduced standard of living
A graduate teacher finishes university and spends several weeks applying for their first teaching job
Frictional unemployment
What is income inequality?
Income inequality means income is not shared evenly across society. Some people earn much more than others.
Give two negative impact of economic growth on the environment
More pollution, higher greenhouse gas emissions, waste, resource depletion, and loss of biodiversity
A person is 30 years old, does not have a job, and is actively applying for jobs. Are they in the labour force?
Yes. They are unemployed and actively looking for work, so they are part of the labour force.
Give three negative impact of unemployment on the economy
Lower production, lower household spending, lower tax revenue, and higher welfare payments
A factory worker loses their job because new technology replaces their role.
Structural unemployment
A country has rising GDP, increasing business profits, low unemployment and strong household spending. Which stage of the business cycle is this most likely to be?
Expansion. The economy is growing because GDP, profits, employment and spending are increasing.
How can economic growth have both positive and negative effects on businesses?
Businesses may earn higher profits and expand, but they also face more competition, higher costs, labour shortages, or stricter environmental regulations
Explain how higher employment can improve living standards in an economy
Higher employment means more people earn income. This can increase household spending, reduce poverty, improve access to goods and services, and increase government tax revenue for public services.
Why can high unemployment reduce economic growth?
High unemployment means fewer people are producing goods and services. Households may spend less because they have less income, so businesses earn less revenue and the economy grows more slowly.
During a recession, a restaurant closes because customers are spending less money. All workers lose their jobs.
Cyclical unemployment
Why can economic growth still lead to inequality?
Economic growth may benefit some groups more than others. For example, business owners and skilled workers may earn more, while low-income workers may not receive the same benefits.
Explain how strong economic growth can improve living standards but also create environmental problems
Economic growth can create more jobs, increase incomes and improve access to goods and services. However, more production and consumption may lead to more pollution, waste, greenhouse gas emissions, and use of natural resources.