Types of Unemployment

Frictional Unemployment Occurs when people try to find a job. They are graduating from high school or college, looking for better working conditions, or seeking a higher wage. *Not always negative. Ex. Job change Dissatisfied, Schooling, “Transitional”

Seasonal Unemployment Occurs when industries adjust to the natural seasonal production schedule. *Not always negative. Ex. Agricultural, summer, or holiday jobs.

Structural Unemployment Occurs when worker’s skills do not match the jobs that are available. Ex. New technology, changes in consumer demand, globalization, lack of education.

Cyclical Unemployment Mirrors the economic cycle. If the economy expanded again, these workers would be able to go back to work. Ex. Low during peak, high during recession. ”laid-off” ”down-size” ”cut-backs”

Additional Factors to Unemployment (Limitations) Underemployment Ex. PhD Flipping Burgers or Working part-time when full time is desired. Discouraged Worker Ex. Could not find a job so they gave up. These do not show up in the unemployment rate. *Worst type!

U.S. Unemployment Rate Somewhere around 5% is considered Full Employment

Figuring Out the Unemployment Rate Employed: Everyone currently working including part-time workers Unemployed: People looking for work or temporarily laid off from work Unemployment Rate: Unemployed Labor Force (Employed + Unemployed) Labor Force: Employed + Unemployed. 11.7 (unemployed) divided by 166.9 (labor force)=.07 .07x 100 = 7% unemployment rate. 155.2 Million 11.7 Million 11.7 Million 166.9 Million

You Try Employed = 145 million The number of unemployed =9.8 million Is this a high or low unemployment rate? 9.8 = .0633 or 6.3% Unemployment Rate 154.8

Calculating Unemployment Now You Try Calculating Unemployment

  Year Civilian Employed Unemployed Total Unemployment Labor Force Population Rate Participation Rate 1960 117 66 4 70 5.7% 60% 1980 168 99 8 107 7.5% 64% 2000 209 135 6 141 4.3% 67%