ABSTRACT
This chapter focuses on the relationship between job loss and the higher average unemployment rate of the past two decades. The upward trend in unemployment is often attributed to higher wage expectations, particularly among lower-wage workers, and to the increased turnover associated with changes in the demographic composition of the labour force. The chapter traces the trend increase in unemployment to the displacement of workers who have traditionally been their families' primary wage support. Before the depression of the 1930s, unemployment was usually explained in terms of the qualifications and wage demands of the unemployed. Any dynamic economy generates some frictional unemployment as a result of labor turnover, the rate at which people are hired, laid off, or quit. Critics of the notion of voluntary unemployment often argue that much unemployment is structural in nature. Structural unemployment denotes a persistent imbalance between the supply and the demand for certain skills within local labor markets.
