economics unit 6, lesson 3©2012, tesccc. objectives define unemployment describe the different...
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Economics Unit 6, Lesson 3©2012, TESCCC
Objectives
• Define unemployment
• Describe the different types of unemployment
• Describe how full employment is measured
©2012, TESCCC
Unemployment
• The number of people (over 16) who do not have jobs but are actively seeking a job.
©2012, TESCCC
What are the problems with unemployment figures?
1. hidden unemployment or discouraged worker.
This is the worker who is no longer looking for a
job so he would not be included with the
unemployment number. This worker is still a
problem for the economy. We are not using
this labor resource efficiently.
©2012, TESCCC
Problems with the unemployment figures
2. under employment- worker’s skills do not
match jobs. The worker is overqualified for a
job or working at a job below their skills. This
could be a person with a master’s degree in
English who is working as a waiter. Again, we
are not using this labor resource efficiently.
Causes unemployment numbers to be understated
©2012, TESCCC
Four Types of Unemployment
©2012, TESCCC
1. Frictional - “between jobs” considered normal, a worker leaves a job to look for a better one. Work your way through college as a waiter and quit to look for better job with your degrees
©2012, TESCCC
Types of Unemployment
2. Seasonal - weather change or annual patterns, change of seasons or weather, cause job loss.
©2012, TESCCC
3. Structural -change in how economy operates; an entire industry fails; people no longer demand or want that product. The worker’s skills do not match the jobs that are available
– workers need new training to enter different industry
– There are four major causes of structural unemployment
©2012, TESCCC
Four Causes of Structural Unemployment1. New technology – new innovations and ideas sometimes
make the old ones obsolete.
2. Change in consumer demand – tastes change and
consumers may stop purchasing old items
3. Globalization – jobs may be relocated to another country
4. Lack of education – some people do not have the minimum
education or training for the jobs available today.
©2012, TESCCC
4. Cyclical - jobs are lost in correlation with the business cycle (recession - lose job). This is the worst type of unemployment for the economy and the one we worry about.
©2012, TESCCC
Economic Impact of unemployment is that our standard of living goes down and the economy faces an economic slowdown.
©2012, TESCCC
Full employment
• An unemployment rate below 6% is considered full employment
©2012, TESCCC
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