Advantages Of Structural Unemployment

707 Words3 Pages
Since the industrial revolution, the world is experiencing a constant and profound change. That change is faster nowadays and more characterized by its technological facet presents in almost all sectors of the economy. Enormous advantages stem from this technological change as well as some negative impacts such as the increase in the structural unemployment.

In this paper, I will explain the advantages provided by technological change but also its drawbacks on structural unemployment. Finally, I will show the actions that governments undertake to effectively address this problem.

An improvement in technology usually means that fewer and/or less costly inputs are needed. If the cost of production is lower, the profits available at a given price will increase, and producers will produce more. With more produced at every price, the supply curve will shift to the right, meaning an increase in supply (Rittenberg, Tregarthen, p.113, 2012). Based on this definition, we can more easily understand the need of governments and firms to develop technology to increase the factors of production. And as the Economist Thomas Malthus said "Necessity is the mother of invention". Thus there is a crucial need to produce faster at low cost and with less effort: machines meet these requirements. Boosting the capacity of production increases the total output of an economy. In fact, according to Rittenberg and Tregarthen, since 2000, the contributions from improvements in factor quality and
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