📅 Cyclical Unemployment
Happens during economic downturns when businesses cut jobs. This type of unemployment can push many people into poverty at once, creating strain on social services.
Poverty as a Social Issue » Unemployment and Poverty
What you'll learn this session
Study time: 30 minutes
- The relationship between unemployment and poverty
- Different types of unemployment and their impact on poverty
- How unemployment affects different social groups
- Government policies addressing unemployment and poverty
- Real-world case studies of unemployment and poverty in the UK
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Unlock This CourseUnderstanding Unemployment and Poverty
Unemployment and poverty are closely linked social issues that affect millions of people in the UK and around the world. When people lose their jobs or can't find work, they often struggle to pay for basic necessities like food, housing and healthcare.
Key Definitions:
- Unemployment: When people who are able and willing to work cannot find a job.
- Poverty: The state of not having enough resources to meet basic needs like food, shelter and clothing.
- Relative poverty: When people have much less income and resources than others in the same society.
- Absolute poverty: When people lack the basic necessities needed for survival.
Quick Facts: UK Unemployment and Poverty
In 2023, around 4.2% of the UK population was unemployed. Meanwhile, about 14.4 million people in the UK were living in relative poverty - that's more than 1 in 5 people.
Types of Unemployment
Not all unemployment is the same. Different types of unemployment have different causes and effects on poverty.
🔬 Structural Unemployment
Occurs when jobs disappear permanently due to changes in technology or industry. Workers may need retraining to find new jobs and communities built around certain industries can face widespread poverty.
🏡 Seasonal Unemployment
Affects workers in industries like tourism, agriculture and retail that have busy and slow seasons. These workers may experience periods of poverty during off-seasons.
📝 Frictional Unemployment
Temporary unemployment that occurs when people are between jobs. Usually doesn't lead to poverty unless it lasts for an extended period.
How Unemployment Leads to Poverty
Unemployment can quickly lead to poverty through several pathways:
💰 Loss of Income
When people lose their jobs, they lose their main source of income, making it difficult to pay for essentials.
🏠 Housing Insecurity
Without steady income, people may struggle to pay rent or mortgages, leading to eviction or homelessness.
🏥 Debt Accumulation
Many unemployed people rely on credit cards or loans to survive, creating a cycle of debt that's hard to escape.
The Poverty Trap
The "poverty trap" refers to situations where people become stuck in poverty because the costs of escaping it are too high. For example, someone might not be able to afford childcare, transportation, or appropriate clothing needed to get and keep a job. This creates a vicious cycle where poverty leads to unemployment, which leads to more poverty.
Long-term unemployment can be especially damaging, as skills become outdated and employers become reluctant to hire people with gaps in their work history. This can push people into deeper poverty and make it harder to escape.
Social Groups Most Affected by Unemployment and Poverty
Some groups are more likely to experience unemployment and poverty than others:
👫 Young People
Young people often face higher unemployment rates due to lack of experience. In the UK, youth unemployment is typically double the overall rate. This can lead to long-term disadvantages in career progression and earnings.
👩 Women
Women are more likely to work in part-time or low-paid jobs, making them vulnerable to poverty. They're also more likely to take career breaks for childcare, which can affect long-term employment prospects.
🎓 Less Educated Workers
People with fewer qualifications face higher unemployment rates and lower wages when employed. They're often the first to lose jobs during economic downturns.
🌎 Ethnic Minorities
In the UK, some ethnic minority groups experience higher unemployment rates due to factors including discrimination and geographic concentration in areas with fewer job opportunities.
Case Study: Deindustrialisation in Northern England
When coal mines and factories closed across Northern England in the 1980s, entire communities faced structural unemployment. Many towns saw unemployment rates above 20%. This led to increased poverty, health problems and social issues that persisted for generations. Some areas still have higher poverty rates today, showing how the effects of unemployment can last for decades.
Government Responses to Unemployment and Poverty
Governments use various policies to address unemployment and reduce poverty:
💼 Job Creation
Investing in infrastructure projects to create jobs and stimulate economic growth.
🏫 Education and Training
Providing skills training and education to help unemployed people find new jobs.
💳 Benefits
Providing financial support like Universal Credit and Jobseeker's Allowance to those without work.
The Welfare State and Safety Net
The UK's welfare state aims to provide a safety net for people experiencing unemployment and poverty. Benefits like Universal Credit help people meet their basic needs while looking for work. However, sociologists debate whether these benefits are adequate and whether they create dependency or provide necessary support.
Case Study: Universal Credit in the UK
Universal Credit was introduced in 2013 to simplify the benefits system by combining six different benefits into one payment. However, it has been controversial. The five-week wait for the first payment has been linked to increased food bank use and rent arrears. This shows how policies designed to address poverty can sometimes have unintended consequences.
Sociological Perspectives on Unemployment and Poverty
Different sociological perspectives explain unemployment and poverty in different ways:
📈 Functionalist Perspective
Functionalists see some unemployment as necessary for a healthy economy. They believe the threat of unemployment motivates workers and that unemployment benefits should be limited to encourage people to find work quickly.
⚖ Marxist Perspective
Marxists argue that unemployment is built into capitalism. They believe employers benefit from having a "reserve army of labour" (unemployed people) because it keeps wages down and makes workers afraid to demand better conditions.
The Cycle of Unemployment and Poverty
Unemployment and poverty often create a cycle that's difficult to break:
- Job loss leads to reduced income
- Reduced income leads to difficulty paying for necessities
- Financial stress can lead to health problems and family tension
- Health problems can make it harder to find new work
- Long-term unemployment makes it even harder to get hired
- This creates entrenched poverty that can pass between generations
Case Study: Zero-Hours Contracts
In recent years, zero-hours contracts have become more common in the UK. These contracts don't guarantee any hours of work, leaving workers with unpredictable incomes. While they provide flexibility for some, they can also lead to in-work poverty, where people have jobs but still don't earn enough to escape poverty. In 2023, around 1 million UK workers were on zero-hours contracts.
Key Exam Tips
When answering exam questions about unemployment and poverty:
- Use specific examples and statistics to support your points
- Consider different perspectives (functionalist, Marxist, etc.)
- Discuss both causes and effects of unemployment and poverty
- Evaluate government policies and their effectiveness
- Consider how different social groups are affected differently