Unemployment ©2012, TESCCC Economics Unit 6, Lesson 3

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. Microsoft. (Designer). (2010). Clip art [Web Graphic]. Retrieved from http://office.microsoft.com/en-us/images/ ©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. Microsoft. (Designer). (2010). Clip art [Web Graphic]. Retrieved from http://office.microsoft.com/en-us/images/ ©2012, TESCCC

Problems with the unemployment figures 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 Microsoft. (Designer). (2010). Clip art [Web Graphic]. Retrieved from http://office.microsoft.com/en-us/images/ ©2012, TESCCC

Four Types of Unemployment Microsoft. (Designer). (2010). Clip art [Web Graphic]. Retrieved from http://office.microsoft.com/en-us/images/ ©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 Microsoft. (Designer). (2010). Clip art [Web Graphic]. Retrieved from http://office.microsoft.com/en-us/images/ ©2012, TESCCC

Types of Unemployment Seasonal - weather change or annual patterns, change of seasons or weather, cause job loss. Microsoft. (Designer). (2010). Clip art [Web Graphic]. Retrieved from http://office.microsoft.com/en-us/images/ ©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 Microsoft. (Designer). (2010). Clip art [Web Graphic]. Retrieved from http://office.microsoft.com/en-us/images/ ©2012, TESCCC

Four Causes of Structural Unemployment New technology – new innovations and ideas sometimes make the old ones obsolete. Change in consumer demand – tastes change and consumers may stop purchasing old items Globalization – jobs may be relocated to another country 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. Microsoft. (Designer). (2010). Clip art [Web Graphic]. Retrieved from http://office.microsoft.com/en-us/images/ ©2012, TESCCC

Economic Impact of unemployment is that our standard of living goes down and the economy faces an economic slowdown. (2012). Slow. (2012). [Print Photo]. Retrieved from http://h30499.www3.hp.com/t5/The-Future-of-Testing-Blog/Attended-and-Unattended-Testing/ba-p/5745707 ©2012, TESCCC

Full employment An unemployment rate below 6% is considered full employment (2013). Playing to win. (2013). [Print Photo]. Retrieved from http://tomhaakhr.wordpress.com/2013/01/02/hr-in-pictures-part-14-playing-to-win/ ©2012, TESCCC