1. EMPLOYMENT… In Our Economy

2. Opportunity Costs How individuals spend their time… At work (income) At play (leisure) Decision: work vs. leisure = individuals value more How individuals spend their time… At work (income) At play (leisure) Decision: work vs. leisure = individuals value more

3. Employment / Productivity Living Standards The employment rate and the rate of productivity determine the level of our living standard.  er +  prod =  standard of living

4. What does it mean to be employed or unemployed? Employed - anyone with a full-time or a part- time job (vacation/sick) Unemployed - Age 16 or older with no job but is actively looking for a job Not in the Labor Force - Age 16 or older who are NOT looking for a job (retired, in school, choose not to work, discouraged workers)

5. “in the labor force” Individuals 16 or older either employed or unemployed “not in the labor force” Do NOT have job AND NOT looking for work (big difference between those who do not have a job and those who are not looking for a job!!)

6. Unemployment Categories Job leavers –Quit their job and immediately begin looking for work New entrants –Never worked but are searching for work Reentrants –Previously worked but were out of labor force before beginning their job search Job losers –Been fired or have been permanently laid off Temporary layoffs –Temporarily released but expect to return to work within 6 months Completed temporary jobs –Began looking for work after their temporary jobs ended

7. Unemployment Rate # of unemployed / # in the labor force (7,000 / 70,000 =.10 or 10%)

8. 3 Types of Unemployment FRICTIONAL CYCLICAL STRUCTURAL

9. FRICTIONAL Temp. gap between jobs in healthy economy 1st time entering job force Quit job to look for better job (skills, training, etc)

10. Frictional Factors vs. Solutions Factors: 1.Young workers 2.Good unemployment benefits Solutions: 1.Reduce unemployment benefits 2.Hire mature workers 3.Agencies/networks (head hunters) 4.Retrain workers

11. CYCLICAL Caused by recession or downturn Less demand for g/s = less demand for workers Typically temporary until economy turns healthy again

12. Cyclical Solutions Develop new skills Work for less pay Later retirement Fewer quit their jobs

13. STRUCTURAL Lack skills needed in the labor market

14. Structural Solutions Lack of skills = new job at lower pay Focus on new industries/location for job Apply for unemployment benefits Training programs or retrained Early retirement

15. Frictional vs. Structural Frictional 1. Supply side event (supply of labor) 2. Short-term problem (30-60 days) 3. Job seekers find new jobs/reenter market Structural 1.Demand side event (demand for labor) 2.Long-term problem 3.Job seekers have to relocate or acquire new skills

16. FULL EMPLOYMENT

17. Does education matter?

19. Other skills… Hard skills: Specific knowledge thru education and training Soft skills: Punctuality Decision making Working with others Problem solving