how structural unemployment works
structural unemployment is caused by forces other than the business cycle this means that structural unemployment can last for decades and may need radical change to redress the situation if structural unemployment is not addressed it can increase the unemployment rate long after a recession is over and increase the natural rate of unemployment which is also known as frictional unemployment hundreds of thousands of well paying manufacturing jobs were lost in the united states over the past three decades as production jobs migrated to lower cost areas in china and elsewhere this decline in the number of jobs is responsible for a higher natural rate of unemployment growing technology in all areas of life increases future structural unemployment because workers without adequate skills will get marginalized even those with skills may face redundancy given the high rate of technological obsolescence and the growing use of artificial intelligence ai structural unemployment is influenced by more than just the business cycle impacted by major mismatches in the employment system causes of structural unemploymentthere are several common triggers that cause structural unemployment one of the primary causes of structural unemployment is technological changes as industries move from one process to another and harness technological capabilities many jobs and roles become obsolete companies may also seek ways to leverage technology as cost cutting measures putting their workforce at risk as the business seeks more efficient ways to operate by extension structural unemployment may be caused by poor training or a lack of education programs as workers get replaced by more efficient processes workers must adapt by learning new business practices should they fail to do so they may perpetuate structural unemployment by not having an appropriate skillset structural unemployment may also be caused by competition and globalization consider how different wage rates around the world may entice companies to see offshore manufacturing processes companies may choose to forgo hiring more skilled domestic workers that demand higher compensation in favor of workers willing to be employed for less 