Unemployment occurs when a person is
available to work and currently seeking
work, but the person is without work.
In USA unemployment is measured by the
Bureau of Labor Statistics (BLS). It surveys
60,000 randomly selected households every
In Poland unemployment is measured by:
the Central Statistical Office (Pol. GUS)
Labour Force Survey (Pol. Badania aktywności
ekonomicznej ludności BAEL)
The LFS is carried out under a European
Union Directive and uses internationally
agreed concepts and definitions.
It is the source of the internationally
comparable (International Labour
Organisation) measure known as 'ILO
All persons who did not have a job at all
during the survey reference week, made at
least one specific active effort to find a job
during the prior 4 weeks, and were available
for work (unless temporarily ill).
All persons who were not working and were
waiting to be called back to a job from which
they had been laid off (they need not be
looking for work to be classified as
on the answers to the
survey questions, the BLS places
each adult into one of three
in the labour force
person is considered employed if he or she
has spent most of the previous week working at a
A person is unemployed if he or she is on
temporary layoff, is looking for a job, or is waiting
for the start date of a new job.
A person who fits neither of these categories,
such as a full-time student, homemaker, or
retiree, is not in the labor force.
Labour force is defined as the sum of the
employed and the unemployed.
potential labour force e.g.
not in the Labour force
The unemployment rate is
calculated as the percentage of
the labour force that is
The labour-force participation rate
is the percentage of the adult
population that is in the labor
Labor - force participat ion rate =
Employment to population ratio is the
proportion of a country's population that is
employed. Ages 15 and older are generally
considered the working-age population.
How to differentiate between a
person who is unemployed and a
person who is not in the labour
People may claim to be unemployed
in order to receive financial
assistance, even though they aren’t
looking for work. They can have
illegal contract of employment.
Classical or real-wage unemployment occurs
when real wages for a job are set above the
This is often ascribed to government
intervention, as with the minimum wage, or
Frictional unemployment occurs when a worker
moves from one job to another. While he
searches for a job he is experiencing frictional
unemployment. This applies for fresh graduates
looking for employment as well.
This is a part of the economy, increasing both
the worker's long term welfare and economic
It is a result of imperfect information in the
labour market, because if job seekers knew that
they would be employed for a particular job
vacancy, almost no time would be lost in getting
a new job, eliminating this form of
Structural unemployment is caused by a
mismatch between jobs offered by employers
and potential workers. This may pertain to
geographical location, skills, and many other
For example, when shipyards are closed down,
many workers will become structural
Much technological unemployment (e.g. due to
the replacement of workers by machines) might
be counted as structural unemployment.
This refers to unemployment that rises during economic
downturns and falls when the economy improves. Keynesians
argue that this type of unemployment exists due to
inadequate effective aggregate demand. It gets its name
because it varies with the business cycle.
In this case, the number of unemployed workers exceeds the
number of job vacancies, so that if even all open jobs were
filled, some workers would remain unemployed.
This kind of unemployment coincides with unused industrial
capacity (unemployed capital goods). Keynesian economists
see it as possibly being solved by government deficit
spending or by expansionary monetary policy, which aims to
increase non-governmental spending by lowering interest
Hidden, or covered, unemployment is the unemployment
of potential workers that is not reflected in official
unemployment statistics, due to the way the statistics are
In many countries only those who have no work but are
actively looking for work (and/or qualifying for social
security benefits) are counted as unemployed. Those who
have given up looking for work are not officially counted
among the unemployed, even though they are not
The same applies to those who have taken early retirement
to avoid being laid off, but would prefer to be working.
The statistic also does not count the "underemployed" those with part time or seasonal jobs who would rather
have full time jobs. Because of hidden unemployment,
official statistics often underestimate unemployment rates.
When the labour costs are high, the employer
and employee could prefer illegal contract of
if one receives unemployment benefit, he
may not be interested in legal work.
Job becoming obsolete
Surplus of labour =
trade union or labor union is an
organization run by and for workers who
have banded together to achieve common
goals in key areas and working conditions.
In the 1940s and 1950s, when unions were
at their peak, about a third of the U.S.
labour force was unionized.
A firm may prefer higher than equilibrium
wages for the following reasons:
Czarny B., „Podstawy ekonomii”, PWE, 2002