Which of the following is an example of structural unemployment?

• A. A retail employee is laid off during a temporary downturn in consumer spending.
• B. A recent college graduate is searching for their first job.
• C. A construction worker is unemployed during the winter when building projects slow down.
• D. A factory worker loses their job because their skills are no longer needed due to automation.

Answer: (D)

Verified step by step guidance

1. Understand the definition of structural unemployment: it occurs when there is a mismatch between workers' skills and the skills needed for available jobs, often due to technological changes or shifts in the economy.
2. Analyze each option to see if the unemployment is caused by a temporary or cyclical factor (like a downturn or seasonal change) or by a fundamental change in the labor market structure.
3. Identify that a retail employee laid off during a temporary downturn represents cyclical unemployment, as it is related to fluctuations in demand.
4. Recognize that a recent college graduate searching for their first job is an example of frictional unemployment, which happens when people are between jobs or entering the workforce.
5. Note that a factory worker losing their job because their skills are no longer needed due to automation is a classic example of structural unemployment, as it reflects a permanent change in the labor market requiring new skills.