Q&A - How are businesses affected by unemployment?

Businesses are affected in a variety of ways depending on whether unemployment is high or low, and rising or falling.

Q&A - What are the main causes of unemployment?

The causes of unemployment can be described under four main categories:
- Seasonal unemployment
- Frictional unemployment
- Structural unemployment
- Cyclical unemployment

Q&A - What has happened to unemployment in the UK?

After a sustained period of falling unemployment and increasing employment, the recession in the UK has prompted a substantial increase in unemployment recently.

Q&A - Explain what unemployment is and how it is measured

Unemployment arises when the supply of those making themselves available for work is greater than the demand for workers.  Unemployment is, therefore, the excess supply of labour in the labour market.

BUSS4 Revision Quiz - Unemployment

This revision quiz tests business students on essential knowledge of unemployment:

Launch interactive quiz on Unemployment

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The lights go out for the nightclub market

Its bad news for shareholders of Luminar - but this news story is packed with rich potential for a business studies lesson…

A textbook example of how rising unemployment affects demand

The substantial rise in youth unemployment in the UK is starting to hit certain markets harder than others.  Here is a great example to use with business students…

Revision Presentation - Unemployment & Business

This streamed revision presentation looks at the issue of unemployment from a business studies perspective.

An editable PowerPoint and importable VLE version of this resource is included in our AQA BUSS4 Teacher Presentation Suite.

Picking from a growing pool of job hunters

Despite evidence that the worst of the current global recession may be behind us, unemployment will continue to ratchet up for some time to come. It remains a lagging indicator of the economic cycle. The economic and social costs of mass unemployment are impossible to deny although hard to measure accurately. For some employers looking to recruit new workers, the growing pool of unemployed workers does provide - on the surface - an opportunity to hire well-skilled and motivated people often desperate for a fresh chance in work. Chris Tighe focused on employers in the North East in this revealing article in the Financial Times.

“More than 9,000 people in the North East are seeking work as sales assistants, it said, but only 191 such jobs have been advertised. Morrisons, the supermarket operator, has just reported an “amazing response” at its new Wallsend store in north Tyneside: more than 900 people applied for 35 posts............At Manchester Airport, where an advertisement posted online for just two weeks in February for four places on its graduate training scheme produced almost 2,000 applications.”

The high and rising ratio of applicants to unfilled vacancies should give businesses the scope to find the right people and perhaps unearth some gems who might rise through the business in the years to come. But although the pool of workers is high, businesses must also face the challenge and considerable cost of screening each application. Few smaller businesses have the luxury of being able to employ human resources personnel. Hiring recruitment companies can be expensive. Often the best new employees fall into your lap because of their vigorous approach to job hunting and an ability to keep their nose to the ground to spot what might be the right job for them.

Q&A - Outline the main costs and benefits of inflation

Inflation has many important costs and consequences for both society and business. However a stable and low level of inflation also provides some upsides for business.