1. Types of Unemployment

2. Frictional Unemployment
Occurs when people try to find a job.
*Not always negative.
Ex. Job change Dissatisfied, Schooling, “Transitional”

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

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

5. Cyclical Unemployment
Mirrors the economic cycle.
Ex. Low during peak, high during recession.
”laid-off”
”down-size”
”cut-backs”

6. 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!

7. 5 Year Unemployment Rate

8. Figuring Out the Unemployment Rate
Employed: Everyone currently working including part-time workers (16). Unemployed: People looking for work or temporarily laid off from work (16). Unemployment Rate: Unemployed Labor Force (Employed + Unemployed) Labor Force: Employed + Unemployed (unemployed) divided by (labor force)= x 100 = 7% unemployment rate.
155.2 Million
11.7 Million
11.7 Million
166.9 Million

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

10. Calculating Labor Force Rate
Labor force participation rate:
% of adult population working.
number in labor force x 100 =
adult population
Example million employed + 5 million unemployed x 100 = 59.78%
92 million population

11. Unemployment Rates Vary by Ethnicity
White 5.3% Hispanics 7.3% African American 11.6% Asian 5.7% Teenagers 19.1%

12. Classifying Unemployment
Now You Try
Classifying Unemployment

13. Year Civilian Employed Unemployed Total Unemployment Labor Force
Population Rate Participation Rate
% 60%
% 64%
% 67%

15. Negative Effects of Unemployment
Smaller tax base.
Less gov’t revenue.
More government entitlements taken.