1. Unemployment

2. 1. Frictional Unemployment
4 Types of Unemployment
1. Frictional Unemployment
“Temporarily unemployed” or being between jobs.
Individuals are qualified workers with transferable skills but they are not working.
Examples: 2

3. 4 Types of Unemployment 2. Seasonal Unemployment
Due to time of year and the nature of the job.
These jobs will come back
Examples:
Amazon to Add 100,000 Seasonal Positions

4. 3. Structural Unemployment
4 Types of Unemployment
3. Structural Unemployment
Changes in the structure of the labor force make some skills obsolete.
(Q jobs supplied > Q jobs demanded)
Workers do not have transferable skills and these jobs will never come back.
The permanent loss of these jobs is called “creative destruction.” (Why?)
***Also includes jobs that are outsourced
Examples: 4

5. 4. Cyclical Unemployment
4 Types of Unemployment
4. Cyclical Unemployment
Unemployment that results from economic downturns (recessions).
As demand for goods and services falls, demand for labor falls and workers are fired.
Examples: 5

6. For all countries there are three major economic goals:
Promote Economic Growth
Limit Unemployment
Keep Prices Stable (Limit Inflation) 6

7. How do we calculate the unemployment rate?
# unemployed x total labor force

8. Labor Force Who is in and who is out
Labor Force Who is in and who is out? - Willing and able - Between the ages of 16 and 64 - Non-institutionalized - With or without jobs

9. Full Employment (NRU)
Level of employment that occurs when the unemployment rate is at NRU
Natural Rate of Unemployment

10. Full Employment (NRU) WHY?
If cyclical unemployment is zero we are at full employment.
It is generally thought to be between 94%-96% employment
There will always be unemployment.
WHY?
Currently the U.S. is at _______% unemployment

12. Problems with Unemployment Data
‘Marginally attached workers’
Discouraged workers
Underemployed

13. Calculate: Unemployment Rate and LFPR
Scenario A
Labor Force – 100 million
Unemployed – 10 million
Employed – 70 million
Discouraged – 20 million
Scenario B
Labor Force – 100 million
Unemployed – 5 million
Employed – 70 million
Discouraged – 25 million

14. The Obama Economy

16. FOX Facts?