What is structural unemployment?

Structural unemployment is the unemployment caused by a mismatch between the skills of workers and the jobs available to those people.

A very common example is if a natural disaster struck an area and destroyed a factory. When the factory is destroyed, hundreds of factory workers are out of a job. Their skills are specialized to work in the factory. They have complete knowledge of how the factory operates, but only knowledge regarding the factory.

There might be other jobs available in town, but the factory workers do not have the proper skills to fulfill those available jobs.

Therefore, they are structurally unemployed because of the mismatch between what skills the factory workers can offer and what skills available jobs require.