Unemployment

Economics 2

What is it?!

• It is not just personal…it is an issue for the national economy as well

• Can measure health of economy by the unemployment rate

• Four kinds:– Frictional– Seasonal– Structural– Cyclical

Poor Man’s Water Heater

Frictional

• Occurs when people take time to find a job– Changing jobs

– Laid off

– After college

– Unsatisfaction

• There are many people in this category

• Not who we consider “poor”

What poor college students eat!

Seasonal• Occurs when industries slow

or shut down for a season or make seasonal shifts in their production schedules.

• Can also result from harvest schedules or vacations…ie School out for summer!

• Soon you and I will be seasonally unemployed!

• This is a normal part of a healthy economy

• This can be difficult for migrant workers

The Grape Picker

Structural

• Occurs when workers’ skills do not match the jobs that are available.

• Five major causes– Development of new

technology

– Discovery of new resources

– Changes in consumer demand

– Globalization

– Lack of educationStreet Cleaner!

Cyclical

• Unemployment that rises during economic downturns and falls when the economy improves

• Recession=lower demand for labor

• Many laid off employees will be rehired when the economy improves

• This can stress the economy

Does Britney fit in this category?!

Measuring Employment

• The government keeps track of how many people are unemployed and why

• Census: official count of the population– Department of Labor– Computes unemployment rate, or the percentage of the

labor force that is unemployed

• Add up the number of employed and unemployed people. That equals the labor force. Then divide the number of unemployed by the total labor force and x by 100.