Did YOU Know?!?  When Scott Paper Company first started manufacturing toilet paper they did not put their name on their product because of embarrassment.  Canola oil is actually called rapeseed oil but the name was changed due to marketing reasons.  The starfish is one of the few animals who can turn it’s stomach inside-out.  After eating, a housefly regurgitates its food and then eats it again.

Unemployment Unit V: Macroeconomics Lesson 2

Unemployment  Unemployment is the amount of people who are without jobs in an economy  It is a good indicator of how an economy is doing  It occurs when someone who is actively and currently looking for work is unable to find work  Labor force: the total number of adult civilians who are working or actively looking for work.  Unemployment rate= Unemployed workers/ Total Labor Force X 100

Types of Unemployment

Frictional Unemployment  Frictional unemployment occurs when people are in between jobs for various reasons.  Reasons may include graduation from school, quitting one job to search for another, or leaving for health and returning to a new job at a later point

Structural Unemployment  Structural Unemployment occurs when the skills of the unemployed do not match the skills of the jobs available.  The five major causes of structural unemployment are new technology, discovery of new resources, changes in consumer demand, globalization, and lack of education

Seasonal Unemployment  Seasonal unemployment occurs when businesses lay off people because there is little or no demand because of the time of year  It can be causes by harvest schedules, demand for holiday workers, or vacations

Cyclical Unemployment  Cyclical unemployment occurs when the whole economy has fallen into a recession due to a lack of demand and labor is laid off  When the economy is in a recession there is less cash flow and businesses must cut costs and lay off employees

Technological Unemployment  Technological unemployment occurs when the process of how a job is done and what tools are used causes businesses to lay off workers  When businesses start using machines to do jobs they can replace hundreds of workers

Not counted in unemployment  Those of working age, but not looking for work are not part of the labor force  Therefore they are not counted as unemployed  This includes stay at home parents, retired workers, people in jail, people in the Armed forces, etc.

Discouraged Workers  Some people, especially during a long recession, give up hope of finding work  They become discouraged workers as they have stopped looking for employment  They may depend on their family members, their savings, or other methods of support  They are also not counted into the unemployment rate

Unemployment Rate

Changes in Unemployment Rate  A normal economy will experience different types of unemployment at various levels at all times  An economy is considered to have full employment when there is no cyclical unemployment  Full employment is at the level of Natural Unemployment  The Natural Unemployment Rate in the US is about 4%

Increase in Unemployment  When a country’s economy enters into a recession or a depression businesses begin to heavily cut jobs  This will drive up the unemployment rate  Examples:  Great Depression caused a 25% Unemployment Rate  2008 Recession in the U.S

Decrease in Unemployment  Increase for goods in a country leads to the creation of more jobs to produce the goods  This will drive down the unemployment rate  Going to war creates a high demand for resources  When the U.S. went into the Korean War the Unemployment Rate dropped to 2.5% in 1952

Underemployed  An economy may be at full employment, but not everyone is happy or in the correct job  Some people may accept a low-skill, low-wage job to make to make ends meet even though they may be highly skilled or highly educated  They may be considered underemployed  They are working at a job that requires far fewer skills than they have  They may be working part-time, but want full-time work