Involuntary unemployment in the context of "Progressivism in the United States"

Structural unemployment is a form of involuntary unemployment caused by a mismatch between the skills that workers in the economy can offer, and the skills demanded of workers by employers (also known as the skills gap). Structural unemployment is often brought about by technological changes that make the job skills of many workers obsolete.

Structural unemployment is one of three categories of unemployment distinguished by economists, the others being frictional unemployment and cyclical unemployment.

The natural rate of unemployment is the name that was given to a key concept in the study of economic activity. Milton Friedman and Edmund Phelps, tackling this 'human' problem in the 1960s, both received the Nobel Memorial Prize in Economic Sciences for their work, and the development of the concept is cited as a main motivation behind the prize. A simplistic summary of the concept is: 'The natural rate of unemployment, when an economy is in a steady state of "full employment", is the proportion of the workforce who are unemployed'. Put another way, this concept clarifies that the economic term "full employment" does not mean "zero unemployment". It represents the hypothetical unemployment rate consistent with aggregate production being at the "long-run" level. This level is consistent with aggregate production in the absence of various temporary frictions such as incomplete price adjustment in labor and goods markets. The natural rate of unemployment therefore corresponds to the unemployment rate prevailing under a classical view of determination of activity.

The natural unemployment rate is mainly determined by the economy's supply side, and hence production possibilities and economic institutions. If these institutional features involve permanent mismatches in the labor market or real wage rigidities, the natural rate of unemployment may feature involuntary unemployment. The natural rate of unemployment is a combination of frictional and structural unemployment that persists in an efficient, expanding economy when labor and resource markets are in equilibrium.

Economic progressivism or fiscal progressivism is a political and economic philosophy incorporating the socioeconomic principles of social democrats and political progressives. These views are often rooted in the concept of social justice and have the goal of improving the human condition through government regulation, social protections and the maintenance of public goods. It is not to be confused with the more general idea of progress in relation to economic growth.

Economic progressivism is based on the idea that capitalist markets left to operate with limited government regulation are inherently unfair, favoring big business, large corporations and the wealthy. Progressives believe that a fair market should result in a normal distribution of wealth, but in most countries the wealthy earn heavily disproportionate incomes. Hence, progressives advocate controlling the markets through public protections that they believe will favor upward mobility, diminish income inequality and reverse marginalization. Specific economic policies that are considered progressive include progressive taxes, income redistribution aimed at reducing inequalities of wealth, a comprehensive package of public services, universal health care, resisting involuntary unemployment, public education, social security, minimum wage laws, antitrust laws, legislation protecting workers' rights and the rights of trade unions and a welfare state.

Occupational health psychology (OHP) is an interdisciplinary area of psychology that is concerned with the health and safety of workers. OHP addresses a number of major topic areas including the impact of occupational stressors on physical and mental health, the impact of involuntary unemployment on physical and mental health, work–family balance, workplace violence and other forms of mistreatment, psychosocial workplace factors that affect accident risk and safety, and interventions designed to improve and/or protect worker health. Although OHP emerged from two distinct disciplines within applied psychology, namely, health psychology and industrial and organizational (I-O) psychology, historical evidence suggests that the origins of OHP lie in occupational health/occupational medicine. For many years the psychology establishment, including leaders of I-O psychology, rarely dealt with occupational stress and employee health, creating a need for the emergence of OHP.

OHP has also been informed by other disciplines. These disciplines include sociology, industrial engineering, and economics, as well as preventive medicine and public health. OHP is thus concerned with the relationship of psychosocial workplace factors to the development, maintenance, and promotion of workers' health and that of their families. For example, the World Health Organization and the International Labour Organization estimated that exposure to long working hours, a risk factor extensively studied by researchers allied to OHP, led 745,000 workers to die from ischemic heart disease and stroke in 2016. The impact of long work days is likely mediated by occupational stress, suggesting that less burdensome working conditions are needed to better protect the health of workers.

In labor economics, an efficiency wage is a wage paid in excess of the market-clearing wage to increase the labor productivity of workers. Specifically, it points to the incentive for managers to pay their employees more than the market-clearing wage to increase their productivity or to reduce the costs associated with employee turnover.

Theories of efficiency wages explain the existence of involuntary unemployment in economies outside of recessions, providing for a natural rate of unemployment above zero. Because workers are paid more than the equilibrium wage, workers may experience periods of unemployment in which workers compete for a limited supply of well-paying jobs.