The reduction of structural unemployment in the United States' economy may require
A) an increase in the minimum wage.
B) a reduction in government spending.
C) an decrease in interest rates.
D) increased spending on worker retraining.

Question

Quizplus · Accepted Answer

Structural unemployment occurs when there is a mismatch between the skills workers possess and the skills in demand in the job market. To reduce this type of unemployment, there needs to be increased spending on worker retraining programs to equip workers with the necessary skills for in-demand jobs. Increasing the minimum wage (A) may boost the incomes of some low-skilled workers but that won't address the skills mismatch. A reduction in government spending (B) may lead to job losses and worsen the unemployment problem. A decrease in interest rates (C) is more relevant to addressing cyclical unemployment, which arises from economic downturns, rather than structural unemployment.

The Reduction of Structural Unemployment in the United States' Economy