UnemploymentUnemployment• What is unemployment rate?

Unemployment Unemployment • Measuring UnemploymentMeasuring Unemployment

• Identifying the Employed and Unemployed

• EmployedEmployed• 16 and older • Work for pay/profit 1 or

more hours • Work with out pay in a

family business 15 or more hrs

• Have a job but not working due to an illness, weather, vacation, or labor dispute

• Unemployment Rate Unemployment Rate • Percentage of people in the

civilian labor force who are unemployed

• (I) time of recession • (D) expansion

• Unemployment Rate = Unemployed / Labor Force (100)

• Problems w/ Unemployment Problems w/ Unemployment Rate Rate • Intensity of job search • Doesn’t include those who you

would thing of as unemployed

• Marginally attached Marginally attached workersworkers• People who held productive

job but have given up looking

• Discouraged WorkerDiscouraged Worker• People who want a job but

have stop looking for work for job related reasons

• Underemployed Underemployed • Worker who have job

beneath their skill level or want a full time job but only have a part time job

• Labor Force StatisticsLabor Force Statistics • Are broken down by:

• Age, sex, race, martial status, industry, and occupation

• Determining Full Determining Full EmploymentEmployment• Not everyone has a

job, and Unemployment can not equal

Types OF UnemploymentTypes OF Unemployment• Frictional Frictional

UnemploymentUnemployment • Workers who move from

one job to another • People who leave their job

to look for another

• Structural Structural UnemploymentUnemployment• Unemployment that occurs

as a result of changes in technology

• Seasonal Seasonal UnemploymentUnemployment• People who work during

certain seasons due to fluctuation of need for work

• Cyclical Cyclical UnemploymentUnemployment • Unemployment due to

recessions and economic downturns

• Natural Rate of Unemployment • frictional and structural

unemployment • Full employment is achieved

when the number of workers seeking jobs is satisfied by the number of jobs available. (Someone may be unemployed because the jobs that are open are not to their liking.) FULL EMPLOYMENT IS NOT 0. THERE ARE ALWAYS PEOPLE LOOKING FOR JOBS.

•GDP Gap• amount by which

actual GDP falls short of potential GDP because of unemployment

Natural Rate of Unemployment

Review Review • Does the unemployment rate accurately

estimate the number of people who are unemployed? Explain your answer.

• Explain the concept of full employment.

• Give an example not mentioned in the text of each of the major types of unemployment.