Structural Unemployment

Technology has been a current trend all over the world. The labor that was previously provided by human beings is with time being replaced by machinery. Companies aim at eliminating employees in the industry to save on the cost of production. The cost of paying for the labor offered by humankind is higher compared to the maintenance and operational costs of the machinery. Additionally, the output of the machinery is much higher compared to the labor provided by the people. Firms also opt to use machinery since the output is of a higher quality compared to the production done by human labor. Thus, the process may leave many people unemployed.

The above-described type of unemployment is Structural employment. It occurs when there exists a shift in the economy in terms of technology, government policies, or competition (Restrepo). This type of unemployment is the most common in the current days since the management of various companies aims at increasing the profits and the quality of the products offered to the public for sale. The change in the production strategy also aims at making the organization to be more competitive compared to other firms in the same industry. For instance, a company that uses advanced technology for production will use less money and increase the output, and hence it may offer quality products at a low price. The cheap and quality products may attract customers to the firm compared to other competitors that could be offering the same or poor quality goods at a high price.

Therefore, structural unemployment may leave many in the industry without jobs as the companies start to embrace the rising technologies.

Work Cited
Restrepo, Pascual. “Skill Mismatch and Structural Unemployment.”  Massachusetts Institute of Technology, 2015.