Structural unemployment is the most serious kind of unemployment because it points to seismic changes in an economy. It occurs when a person is ready and willing to work, but cannot find employment because none is available or they lack the skills to be hired for the jobs that do exist. Oftentimes, these people may be jobless for months or years and may drop out of the workforce entirely.

This kind of unemployment may be caused by automation that eliminates a job held by a person, such as when a welder on an assembly line is replaced by a robot. It may also be caused by the collapse or decline of an important industry due to globalization as jobs are shipped overseas in pursuit of lower labor costs. In the 1960s, for example, about 98 percent of shoes sold in the U.S. were American-made. Today, that figure is closer to 10 percent.

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