Unemployment is defined as the situation whereby an individual is willing and has the capability to work, but there is no available work opportunity for the individuals (Layard & Nickell, 2005). The situation or status of unemployment is experienced in various ways such as: cyclical, geographical, structural, casual, real wage, and frictional unemployment. Real wage unemployment is experienced when the market standard for wages is too high and employers are unable to absorb any more employees in order to maximize on profits. Structural unemployment is experienced when there is a collapse of the structures that makes it possible for employment to exist. Cyclical unemployment is reliant on the cycles of the business’ or organization’s boom. For example, companies or organizations are likely to lay off workers when the business’ operation is low or when the business is facing losses. Frictional unemployment occurs when people leave their jobs voluntarily to search for new ones. Geographical unemployment is a result of inability of the residents within an area to meet the skills required for the available occupational profiles within the area. Casual unemployment is experienced when workers in the casual employment take a break as they wait for a job opportunity to appear.
Cyclical unemployment is most directly related to the economic circumstances which led to the change in the manufacturing base in Toledo, Ohio, from auto parts to solar panel glass manufacture. Cyclical unemployment is experienced especially when there is a drop in consumer demand for products or services. In the case of Toledo, auto parts business had experienced collapse and companies were laying off workers in thousands; the strategy was implemented in order to lower cost of production, and hence maximize profits. The reinvention of Toledo manufacturing industry played a significant role in absorbing the workers who had been laid off from mainly the downturns and upturns of the auto parts business (Wessner, 2011).
The change in manufacturing from auto parts to solar panel glass parts in Toledo played an important role of lowering the unemployment gap and rate resulting from the downturns of the auto business. The change was timely as it addressed the more than 9,500 jobs lost between 2001 and 2004 in the cyclic unemployment (Heron & Harrington, 2005). The solar industry opened the need for expansion of other important factors for smooth trade as infrastructure. At the time, there was high unemployment in Toledo due to auto companies’ need to reduce cost of production due to their financial states. The presentation of the solar industry change helped to solve short-term problems such as financing of city services.
Technology plays a role in enabling the American nation to overcome short-term problems and long term problems. This is because technology presents a platform for the industries to make viable innovation that can meet the market demands. Consumer demands, especially in the manufacturing industry, are dependent on global changes and trends that need incorporation of efficient and reliable products.
Changing technology is quite an expensive venture to individuals and the likely short-term costs are cost of switching from one product to the new one and the lack of competition. When a new product is introduced in the market, cost of switching to the new product is high; considering that some of old technology may be deemed redundant by the new technology. On the same note, a new product stands at better competitive advantage as there is no viable product to compete with, in the end, consumers pay highly for the new product. However, the consumer stands to gain through long term benefits such as efficient and reliable products and a closure of exploitation by monopoly companies in the market. The long term costs of technology change in the society are the introduction of less efficient imitated products and dependability on a single product (Cooper, 1995).