Unemployment 13.1 Why should our nation be concerned about unemployment? Gauges the economic health of a country by tracking the number of people who are out of work. High rates can hurt the economy; Nation loses goods and services Businesses lose sales Government support of unemployed Societal consequences of unemployment?

Unemployment 13.1 Measuring Unemployment Census Bureau conducts surveys and collects information on: How many people unemployed? How long been jobless? How does it affect different regions of the country? How does it affect different industries? Bureau of Labor Statistics publishes results.

Identifying employed/unemployed 13.1 Classified as part of the labor force if: Are 16 years of age Are actively looking for work Worked for pay one or more hours Worked w/o pay in family business 15 hours or more. Have a job but did not work because of illness, weather, vacations, labor disputes.

Calculating Unemployment # of people unemployed # of people in the labor force

4 Categories of Unemployment Frictional Structural Seasonal Cyclical

Types of Unemployment 13.1 Four Categories of Unemployment: Frictional—Workers moving from one job to another job. Voluntary or involuntary. Examples – Take time off to search for a job Laid off – because of issues within the company Fired take time off after finishing school take time off to care for young children

Types of Unemployment Structural – Occurs when workers’ skills do not match those needed for the jobs that are now available Development of new technology Discovery of new resources Changes in consumer demand Globalization Lack of education

Types of Unemployment Seasonal—Fluctuates from season to season Farming Construction Even professional athletes and teachers become seasonally unemployed. Cyclical—Results from recessions and economic downturns. Long term pattern.

Unemployment 11.1 Unemployment Rate—The % of people in the civilian labor force who are unemployed but actively seeking employment. Marginally attached workers—people who once held jobs but have given up looking for work. However, they want to work and are open to accepting jobs that are offered. Also known as discouraged workers.

Unemployment 13.1 Under-employed—Represents wasted resources and lost output. Ex. Recent college grad who cannot find a job and must wait tables. An engineer who works as a construction worker Note: Full Employment - Economists generally feel that if 95% of the people are working (5% unemployed is considered acceptable). The economy is healthy and functioning properly.