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Friday, April 20, 2012
maintaining structural unemployment is a balancing act
If a certain skill is scarce (supply is low) but much needed by employers (high demand), a worker with those skills has ample bargaining power as regards his/her wage. If there is a surplus of a certain skill (high
supply), which is not much in demand by employers, workers with those skills will have less
bargaining power and may experience unemployment.
http://www.ilo.org/public/english/dialogue/actemp/downloads/projects/youth/tackling_ye_guide_en.pdf, page 21
However it is better that everyone is skilled enough for their respective fields than there be a scarcity of labour in the labour market.