7. Employment and Unemployment

Work takes up a major part of most people’s waking time. When we look at seven of the world’s largest economies in 2019, we see that the average person in employment did 35 hours of paid work a week in their main job. Work is the main source of income for the vast majority of the working-age population (adults who are below retirement age) around the world.

Employment is defined as the state of having paid work. It captures both people who work for themselves (we call them self-employed) and people who work for another person or for a firm (we call them employees) in exchange for a wage. Unemployment is a situation when a person who is able and willing to work is not employed.

In most countries, most people who are of working age are usually in employment. However, there are always some people who are unemployed, such as young people who finish education or migrants who have arrived in the country and are starting to look for a job (like migrants in Hegemony). Unemployment tends to rise in recessions, or economic downturns, when demand for goods and services falls and firms do not need as many workers as before.

The market in which people and firms trade labor services is called the labor market (see political economy part). Governments often regulate the labor market, for instance by establishing a minimum wage level, as they are able to do in Hegemony