Involuntary unemployment
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| - | The '''social safety net''' is a collection of services provided by [[Sovereign state|the state]] or other institutions such as [[friendly society|friendly societies]], including [[Welfare (financial aid)|welfare]], [[unemployment benefit]], [[universal healthcare]], [[homeless shelter]]s, and sometimes subsidized services such as [[public transport]], which prevent individuals from falling into [[poverty]] beyond a certain level. | + | '''Involuntary unemployment''' occurs when a person is willing to work at the prevailing wage yet is [[unemployed]]. Involuntary unemployment is distinguished from voluntary unemployment, where workers choose not to work because their [[reservation wage]] is higher than the prevailing wage. In an economy with involuntary unemployment there is a surplus of labor at the current real wage. Involuntary unemployment cannot be represented with a basic [[supply and demand]] model at a competitive equilibrium: All workers on the labor supply curve above the market wage would voluntarily choose not to work, and all those below the market wage would be employed. Given the basic supply and demand model, involuntarily unemployed workers lie somewhere off of the labor supply curve. Economists have several theories explaining the possibility of involuntary unemployment including [[implicit contract theory]], [[Disequilibrium macroeconomics|disequilibrium theory]], staggered wage setting, and [[efficiency wages]]. |
| - | A practical example of how the safety net works would be a single mother with several children, [[Involuntary unemployment|unable to work]]. By receiving money from the government to support her children, along with universal health care and free education, she can give her children a better chance at becoming successful members of society, rather than be caught up in the hopelessness of extreme poverty. | ||
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| - | Comparisons of systems are endless, and among the most common are the ones between [[Canada]] and the [[United States]], due to their proximity. Supporters of a strong social safety net argue that these programs have resulted in a much lower crime rate and general lower poverty levels in Canadian cities, and this benefits everyone. Critics argue that the taxes required to support the safety net inhibit growth and actually increase the barriers for socio-economic advancement, and that the safety net itself creates a [[perverse incentive]] to be unproductive and poor. | ||
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| - | A principal part of Canada's social safety net is its universal healthcare, known as [[Medicare (Canada)|Medicare]], which was first proposed by [[Tommy Douglas|Thomas Clement "Tommy" Douglas]] (called one of the "[[Father of medicare|fathers of medicare]]"); in part for this, in 2004 Douglas was voted [[The Greatest Canadian]] for his achievements and contributions to Canada. | ||
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| - | In [[South Africa]] there are grants for people unable to support themselves. Many of the grants are focused on children. Social services administer these grants. | ||
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| - | ==See also== | ||
| - | *[[Social insurance]] | ||
| - | *[[Social network]] | ||
| - | *[[Social security]] | ||
| - | *[[Social welfare provision]] | ||
| - | *[[Welfare (financial aid)]] | ||
| - | *[[Welfare state]] | ||
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Involuntary unemployment occurs when a person is willing to work at the prevailing wage yet is unemployed. Involuntary unemployment is distinguished from voluntary unemployment, where workers choose not to work because their reservation wage is higher than the prevailing wage. In an economy with involuntary unemployment there is a surplus of labor at the current real wage. Involuntary unemployment cannot be represented with a basic supply and demand model at a competitive equilibrium: All workers on the labor supply curve above the market wage would voluntarily choose not to work, and all those below the market wage would be employed. Given the basic supply and demand model, involuntarily unemployed workers lie somewhere off of the labor supply curve. Economists have several theories explaining the possibility of involuntary unemployment including implicit contract theory, disequilibrium theory, staggered wage setting, and efficiency wages.
