Are UK Wage Rates too high?
Discuss the view that the main cause of unemployment is that wage levels are too high.
Unemployment is defined as those who are able, available, willing and actively seeking work at the going wage rates, but who cannot find paid employment and are eligible to claim the Job Seekers Allowance (JSA).
The government use the claimant count (JSA) as their form of measuring unemployment but there are other ways of measuring unemployment. Unemployment can also be measured by the Labour Force Survey and is a questionnaire which is handed out to a number of households; they also interview people to find out their employment status. What you find is that the Labour Force Survey’s results come back with a higher rate of unemployment compared to the Government’s claimant count.
Unemployment is one of the Government’s key economic objective, they have designed and implemented different policies in a strategically way in which to look at dealing with unemployment and problems associated with it, such as the minimum wage which looks at being an incentive to get the unemployed back into work etc.
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