And UNEMPLOYMENT
Video tutorial:
 EPISODE 18: Unemployment (2:50)

THE LABOR FORCE:
 Includes all the members of the population who
are employed or actively looking for work
 Only adults (ages 16 +) who are NOT incarcerated
 DISCOURAGED WORKERS: people not in the
labor force; they want to work but have given up
looking for a job because they don’t believe any are
available
 UNDEREMPLOYED WORKERS: work at jobs
which pay below their skill level; often work 2 or
more jobs; are counted
AVERAGE LABOR
PRODUCTIVITY
 a measure of how much the typical worker can
produce
 Mathematically, this is the economy’s
AVG. LABOR
PRODUCTIVITY
=
TOTAL OUTPUT (GDP)
TOTAL # OF WORKERS
UNEMPLOYMENT:
UNEMPLOYMENT RATE: the
number of people employed
divided by the labor force
4 TYPES OF UNEMPLOYMENT
STRUCTURAL
CYCLICAL
FRICTIONAL
SEASONAL
Video Tutorial :
 EPISODE 19: Types of Unemployment (4:19)
STRUCTURAL UNEMPLOYMENT
 Results from changes in the goods that
consumers demand
 Results from changes in TECHNOLOGY –
PROGRESS! “Gale of creative destruction” –
Joseph Schumpeter
 It’s a mismatch between SKILLS workers
possess and SKILLS the market demands
(People don’t want BUGGY WHIPS; they
want STEERING WHEELS now!)
CYCLICAL UNEMPLOYMENT
 Due to fluctuations in the business cycle
 MOST SERIOUS TYPE: the economy is in trouble
 CONTRACTING
 IN A TROUGH
 IN A RECESSION
 RECESSION:
 two consecutive quarters (6 mo.)
negative growth in GDP
 DEPRESSION:
 eight consecutive quarters (2 yrs.)
negative growth in GDP
of
of
FRICTIONAL UNEMPLOYMENT
 Results from the time-lag between when a worker is
fired or quits his job and when he finds a new one
 Job searching, applying and interviewing, relocating,
and moving up!
 Can NEVER be eliminated (only reduced)
 Not always bad! (quit a crummy job for a better one!)
SEASONAL UNEMPLOYMENT:
 Jobs are associated with seasons
 Lifeguards = unemployed in the winter
 Roofers = work during hot summer
NATURAL UNEMPLOYMENT RATE
 Even when the ECONOMY is at FULL EMPLOYMENT,
some types of UNEMPLOYMENT are inevitable:
--frictional (main component of natural
unemployment)
--seasonal (least serious)
--STRUCTURAL (serious) due to progress!
(Think buggy whips)
Recently viewed as 4 to 5 %,
but could be moving up!
Current Unemployment Rate
Nov. 2010: 9.8%
Newshour Reports:
 REALITIES of the Recession & Changing Workforce
(20:44)
 UNEMPLOYMENT - Many Left Uncounted (10:53)
 FINDING WORK (7:21)
 LENGTHY JOBLESSNESS TAKES TOLL ON 99ers
(9:19)
STRESS and BURNOUT TAKING TOLL on WORKERS
(7:53)
CARDS UP on EMPLOYMENT!
 1. Which of the following groups is part
of the labor force?

a. people in prison

b. people in the army

c. people who are retired

d. people under sixteen

e. people counted in the
unemployment rate
2. Frictional unemployment is
caused by
 a. obsolete (outdated) skills
 b. economic downturn
 c. high inflation
 d. undervalued currency
 e. time-lag between jobs
3. Structural unemployment is
caused by
 a. skills mismatch
 b. undervalued currency
 c. economic downturn
 d. high inflation
 e. time-lag between jobs
4. Cyclical unemployment is
caused by
 a. time-lag between jobs
 b. economic downturn
 c. undervalued currency
 d. high inflation
 e. skills mismatch
1 26. Bob is laid off during a
recession. He is
 a. frictionally unemployed
 b. seasonally unemployed
 c. cyclically unemployed
 d. structurally unemployed
 e. technologically unemployed
3. Bill’s is a roofer. He doesn't work
in Dec.-Mar. He's
 a. seasonally unemployed
 b. structurally unemployed
 c. cyclically unemployed
 d. technologically unemployed
 e. frictionally unemployed
 28. Betty lost her job as a key punch
operator when the computer industry
advanced to optical scanning and other
easier forms of input:

a. seasonally unemployed

b. frictionally unemployed

c. technologically unemployed

d. structurally unemployed

e. cyclically unemployed
 5. Jill recently quit her job as a
restaurant hostess because she just
finished college and is going to work as
a physical therapist.

a. technologically unemployed

b. cyclically unemployed

c. seasonally unemployed

d. structurally unemployed

e. frictionally unemployed
 6. An abnormally high rate of which
type of unemployment indicates a
problem in the economy?

a. seasonal

b. frictional

c. structural

d. technological

e. cyclical
 7. Which of the following is not
counted in the natural rate of
unemployment and indicates a
problem in the economy?

a. frictional unemployment

b. technological unemployment

c. cyclical unemployment

d. seasonal unemployment

e. structural unemployment
 8. In the United States, the natural rate
of unemployment is approximately

a. 2%

b. 15%

c. 0%

d. 10%

e. 5%
END OF QUIZ
Video Tutorial on UNIONS:
 LABOR & MANAGEMENT (30:00)