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 didnʹt have the skills necessary to work making DVDs. This occurrence is best consider an example of
A) structural unemployment.
B) cyclical unemployment.
C) frictional unemployment.
D) underemployment.

Question

Quizplus · Accepted Answer

Structural unemployment occurs when changes in technology or the structure of an industry lead to a decline in demand for certain types of jobs, and workers who previously held those jobs do not have the necessary skills for the new jobs that are available. In this case, the shift from video tapes to DVDs led to a decline in demand for workers who manufactured tapes, while the demand for workers who could manufacture DVDs increased. Those who lost their jobs due to this change were structurally unemployed because they did not have the skills necessary to work in the new industry.

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