In the 1990s, video recordings were made primarily on tapes. However, in the 2000s DVDs became increasingly popular, leading to a sharp decline in video tapes. As a result, many people who manufactured tapes lost their jobs and didn't have the skills necessary to work making DVDs. This occurrence is best consider an example of
A) cyclical unemployment.
B) frictional unemployment.
C) structural unemployment.
D) underemployment.

Question

Quizplus · Accepted Answer

This is an example of structural unemployment, because the decline of video tapes and the rise of DVDs led to a structural shift in the industry, resulting in a decrease in demand for tape-related jobs and an increase in demand for DVD-related jobs. The workers who lost their jobs due to this shift did not have the necessary skills or training to work in the new DVD industry, and thus were structurally unemployed.

In the 1990s, Video Recordings Were Made Primarily on Tapes