Unemployment

Warm-Up If America’s real GDP in 2010 was $15.03 trillion and its real GDP in 2011 was $15.29 trillion, what was the percentage economic growth? Be prepared to share how you chose to solve this problem

Economic Growth Economic growth is measured by finding the percentage change in real GDP from one time period to the next. If the percentage change is positive, then growth took place. Year 2 GDP – Year 1 GDP ______________________ Year 1 GDP X 100

Try another one… Year Real GDP (in trillions) 2013 $16.78 2014 $16.98 2015 $17.03 Which of these years experienced the greatest economic growth?

Economic Indicators

The Labor Force Individuals that are willing and able to work. All nonmilitary people who are employed or unemployed. Also known as the workforce.

So, what if I don’t fall into any of those categories? Millions of Americans are not counted as part of the workforce. They include: Military Personnel Institutionalized individuals (prison, hospitals) Retired workers Stay at home parents Children, students People who have given up looking for jobs! (hidden unemployment)

Okay, so who is unemployed? You are considered unemployed if… You are 16 yrs or older, not institutionalized, not working and meet one of the following criteria: Temporarily laid off from their jobs Will report to a new job within 30 days Are not working but have looked for work in the last 4 weeks.

So, Who is employed? You are considered employed if: 16 yrs or older and… Worked at least one hour for pay within the last week or… Worked 15 or more hours without pay in a family business or… Held a job but did not work due to illness, vacation, labor disputes, or bad weather.

Structural Unemployment When the skills of workers do not match the skills needed by the labor market. There can be many jobs available, but the structurally unemployed worker can’t fill the job positions, usually because they don’t have the appropriate training or skills. Long-run unemployment

Frictional Unemployment Someone leaves their job in search of another one, or when someone previous outside the labor force enters the labor market in search of a job. (Long- run unemployment) Examples: Recent college grad looking for their first professional position. A teacher whose spouse transferred to another state and is looking for a job in the new state. Someone who has left a job because they were unhappy with their current wages.

Seasonal Unemployment Seasonal unemployment occurs when people are unemployed at particular times of the year. For example, in a Ski resort unemployment is likely to be higher in the summer when there is no snow. In tourist areas, seasonal unemployment could be a big problem because work is only available for a few months a year.

Cyclical unemployment Occurs when workers lose their jobs due to a downturn in the economy. Refers to the business cycle* Short-run unemployment