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Unemployment

Unemployment. Unemployment Rate. The Unemployment Rate = the number unemployed divided by the workforce. UNEMPLOYED / WORKFORCE. Unemployment Rate ( URate ). Workforce = 200M, 20M are unemployed, the URate = 10% 150M, 30M are unemployed, URate = _________

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Unemployment

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  1. Unemployment

  2. UnemploymentRate • The Unemployment Rate = the number unemployed divided by the workforce. UNEMPLOYED/WORKFORCE

  3. UnemploymentRate (URate) • Workforce = 200M, 20M are unemployed, the URate = 10% • 150M, 30M are unemployed, URate = _________ • 100M, 5M are unemployed, URate = __________

  4. Unemployment Rate • What is acceptable? • Up to 6%

  5. UnemploymentRate • What is acceptable? • Up to 6% • What is considered “full employment”? • About 4.5% URate, no cyclical unemployment, All factors of Production (LLC) in use.

  6. Employment Statistics • Start with the total population of the US. • Subtract those under 16 • Subtract those in the military • Subtract those “institutionalized”

  7. Employment Statistics • This leaves the “Non Institutional Adult” population. • Subtract those retired and receiving retirement funds • Subtract homemakers • Subtract full time students over 16 • Subtract the “discouraged”

  8. Employment Statistics • This leaves the “Civilian Labor Force” • Count full time workers (40 hrs. per week) • Count part time workers (15-39 hrs per week) • Count “unpaid” family business workers (part of the family) • Count those on sick leave, strike, vacation • Subtract those looking but not finding, changing careers, etc.

  9. Types of Unemployment • Frictional: Someone is between jobs, about to start one-always present. • Example: Rene just graduated college and is looking for a job. • Example: Fabian just ended his tour in the military and is looking for a job as a Mercenary for the Government.

  10. Types of Unemployment • Seasonal: due to climate…more prevalent in the Northern climates • Example: Fabiola’s job as an Ice Road Trucker closes during the summer. • Example: Andre’s roofing business closes for the winter.

  11. TypesofUnemployment • Cyclical: results from swings in the business cycle-not present during full employment • Example: Jerry loses his job drawing doodles because demand for drawings is low. • Example: Gabby loses her job because business is too slow at Spanky McGee’s Gift Emporium.

  12. Types of Unemployment • Structural: due to a change in industry, or a new technology • Example: David’s VCR repair shop closes.

  13. What are the problems with unemployment figures? 1. hidden unemployment or discouraged worker. This is the worker who is no longer looking for a job so he would not be included with the unemployment number. This worker is still a problem for the economy. We are not using this labor resource efficiently.

  14. Problems with the unemployment figures • under employment- worker’s skills do not match jobs. The worker is overqualified for a job or working at a job below their skills. This could be a person with a master’s degree in English who is working as a waiter. Again, we are not using this labor resource efficiently. Causes unemployment numbers to be understated

  15. Economic Impact of unemployment is that our standard of living goes down and the economy faces an economic slowdown.

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