The rise of cyclical unemployment
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Across the country and on a daily basis you will read of stories where workers are facing the threat or the reality of losing their jobs.
The economy is in recession and this brings about a fall in the aggregate demand for labour and a rise in cyclical unemployment. In many of the examples I have shown below, the root cause of the labour shedding is a decline in demand in a related industry – for example a cement factory that is finally shutting down because of the severity of the slump in new house-building. Or the employees at a local newspaper in Guernsey in the Channel Island affected by the steep drop in demand for traditional forms of media advertising.
Newspapers shedding staff because of a decline in advertising revenue
Low cost airlines suspending flights from Birmingham due to a decline in demand for city breaks
Agency workers losing their jobs as car plants scale back production and mothball their factories for weeks at a time
Employees at Speedferries facing unemployment as their business falls into administration and fails to find a buyer
Dockers face redundancy as a slump in imports and exports hits port businesses
A slump in sales causes over a thousand workers to lose their jobs at Yell.com
The downturn in construction and high energy costs leads to job losses at a Cambridgeshire cement factory
It is worth reading through some of these stories and considering the negative multiplier effects on the local economies. How many of those who are made redundant will find fresh employment in the current macroeconomic climate?
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