1. Types of Unemployment

2. How does the government measure unemployment?

3. prison, nursing home, etc… Everyone else is included
The Bureau of Labor Statistics (BLS) takes a representative survey of about 60,000 households every month to determine the unemployment rate.
The survey excludes:
under 16 years old
active duty military
institutionalized –
prison, nursing home, etc…
Everyone else is included

4. How are people classified?
Employed
Unemployed
Not in the work force

5. Employed
You are considered employed by the BLS if you have worked at least one hour for pay in the past week.

6. Unemployed
Jobless, but looking for work You must have actively looked for work (sent out resumes, interviewed, etc…) in the past four weeks.

7. Not in the Labor Force
Eligible to be employed but not working or actively looking for work.
Includes full-time students, retired, disabled, those prevented by family obligations from taking a paying job.

9. How is unemployment calculated?
Rate =
Number of unemployed
Number in the labor force
X 100
Not in the
labor force
94.51 mil
Employed
mil
Unemployed
7.91 million
Adult population ( mil)

10. = Unemploy- ment Rate Number of unemployed Number in the labor force
X 100
Adult population ( mil)
Employed
mil
Unemployed
7.91 million
Not in the
labor force
94.51 mil
7.91 million
million
= .0503
X 100
= 5%
as of Nov. 6, 2015

11. Four Types of Unemployment
Frictional unemployment
Structural unemployment
Seasonal unemployment
Cyclical unemployment

12. Frictional Unemployment
Someone “between jobs”
Voluntarily (quit) left one job and looking for another
Looking for your first job
Usually short term
Unavoidable in market economy
Good for the economy

13. Structural Unemployment
There is a mismatch between what companies need and what workers can offer.
Workers may lack the requisite job skills, or they may live far from regions where jobs are available but are unable to move there. Or they may simply be unwilling to work because existing wage levels are too low.
Can be longer term

14. Seasonal Unemployment
Demand for labor depends on the season
Tourism, agricultural, construction, Christmas season – employ seasonally
Teenagers in the summer → unemployment goes up because teens looking for work

15. Cyclical Unemployment
Unemployment due to a decline in business activity during an economic downturn or recession
Simply not enough jobs to go around
NOT due to changing jobs or lack of worker’s skills

16. Will we ever get to 0% unemployment?
Full employment is considered to be between 4% - 6% unemployment. Why?
This is also called the natural unemployment rate.

17. What type of Unemployment is this?

18. What type of Unemployment is this?

19. What type of Unemployment is this?

20. What type of Unemployment is this?

21. What type of Unemployment is this?

22. What type of Unemployment is this?

23. What type of Unemployment is this?

24. What type of Unemployment is this?