Transcript Unemployment - Jefferson Forest High School

Unemployment
Objectives
 Students will describe frictional, seasonal, structural, and
cyclical unemployment
 Students will describe how full employment is measured
 Students will explain why full employment does not mean
that every worker is employed
Frictional Unemployment
 Temporary unemployment caused by the time
required for workers to move from one job to another or
find initial employment
 Workers with marketable skills may be fired
 Workers may quit jobs to accept or look for new ones
 Workers first entering the job force – just graduated from high
school or college
 Workers reentering the labor force
Frictional Unemployment
 Jobs requiring the skills of these unemployed workers are
available and these unemployed workers are considered
“between jobs”
 Cause of frictional unemployment is the transition time to
match a job applicant with a job vacancy
 Economist consider frictional unemployment as a normal
condition of an economy permitting freedom of job choice
Seasonal Unemployment
 Unemployment that occurs as a result of harvest
schedules or vacations or when industries slow or shut
down for a season
 Ski resort workers
 Farms workers who harvest crops at certain times
 Construction workers may be laid off in cold weather
 These workers will be employed again after a period of
time
 This type of employment always exists
Structural Unemployment
 Unemployment caused by when the skills of workers do not
match the skills required for existing jobs
 Caused by a mismatch of skills in that the workers do not
have the skills required for existing jobs
Structural Unemployment
 Causes of structural unemployment
 Lack of education
 Workers lack the education to perform available jobs.
 Greatly affects teenagers and people who drop out of school
 Example – many jobs require computer skills that some people do not
have without adequate training and education
Structural Unemployment
 Causes of structural unemployment
 Changes in consumer demand
 The reduction of demand for certain products causes workers to become
unemployed
 Result is often the need for workers to be retrained in other areas
 Technological advances
 Implementation of new technology results in workers no longer being
needed – machines replace workers
Structural Unemployment
 Causes of structural unemployment
 Globalization
 US companies are outsourcing US jobs to many other countries – India,
China, etc
 Outsourcing – the practice of a company having its work done by another
company in another country
 US workers lose their jobs and require retraining
 Economists consider a certain level of structural
unemployment inevitable
Cyclical Unemployment
 Unemployment caused by the lack of jobs during a
recession
 Directly attributable to the lack of jobs caused by the
business cycle
 When real GDP falls
 Companies close
 Jobs disappear
 Workers scramble for fewer available jobs
Full Employment
 Full Employment – the rate of unemployment that exists




without cyclical unemployment
It does not mean zero percent unemployment
Full employment occurs when an economy operates at
an employment rate equal to the sum of frictional,
seasonal, and structural unemployment rates
Full employment rate is usually considered to be around
5%.
Underemployment
 Working at a job for which one is underqualified or working
part time when they desire full time
The Impact of Unemployment
 Various labor market groups do not share the impact of
unemployment equally
 Example – 2010 unemployment
 9.6 percent overall
 Rate higher for males than females
 Rate higher for African-Americans than whites and Hispanics
 Teenagers had the highest rate
 Having a college education greatly reduced the unemployment
rate – great importance to have a college degree
Questions?
What is the difference between seasonal unemployment and structural
unemployment?
A. Seasonal unemployment occurs because of schedules, whereas
structural occurs because people lack skills.
B. Seasonal unemployment is rare in a modern society, whereas
structural is not.
C. Seasonal unemployment occurs only in the summer, whereas
structural can occur all year round.
D. Seasonal unemployment is generally among low-paid workers,
whereas structural is among the highly paid.
Questions?
What is the difference between seasonal unemployment and structural
unemployment?
A. Seasonal unemployment occurs because of schedules, whereas
structural occurs because people lack skills.
B. Seasonal unemployment is rare in a modern society, whereas
structural is not.
C. Seasonal unemployment occurs only in the summer, whereas
structural can occur all year round.
D. Seasonal unemployment is generally among low-paid workers,
whereas structural is among the highly paid.
Questions?
When Alison, a college math professor, leaves her job at a small
rural college and starts looking for a job at large urban university,
she is
A.
B.
C.
D.
frictionally unemployed.
structurally unemployed.
cyclically unemployed.
a discouraged worker.
Questions?
When Alison, a college math professor, leaves her job at a small
rural college and starts looking for a job at large urban university,
she is
A.
B.
C.
D.
frictionally unemployed.
structurally unemployed.
cyclically unemployed.
a discouraged worker.
Questions?
Charles is a skilled worker in a textile factory creating designer
coats. The company has decided to use robots to create these coats.
As a result, Charles becomes unemployed because he does not have
the skills needed to operate the new robotic system. This is an
example of which type of unemployment?
A.
B.
C.
D.
frictional unemployment.
structural unemployment.
cyclical unemployment.
seasonal unemployment.
Questions?
Charles is a skilled worker in a textile factory creating designer
coats. The company has decided to use robots to create these coats.
As a result, Charles becomes unemployed because he does not have
the skills needed to operate the new robotic system. This is an
example of which type of unemployment?
A.
B.
C.
D.
frictional unemployment.
structural unemployment.
cyclical unemployment.
seasonal unemployment.
Questions?
If Bob loses his job at the GM plant because car manufacturing is
slow due to a downturn in the economy, you can conclude that he is
A.
B.
C.
D.
cyclically unemployed.
seasonally unemployed.
structurally unemployed.
frictionally unemployed.
Questions?
If Bob loses his job at the GM plant because car manufacturing is
slow due to a downturn in the economy, you can conclude that he is
A.
B.
C.
D.
cyclically unemployed.
seasonally unemployed.
structurally unemployed.
frictionally unemployed.
Questions?
When the economy is working properly, what is the unemployment
rate?
A.
B.
C.
D.
0 to 3 percent
4 to 6 percent
8 to 10 percent
10 to 12 percent
Questions?
When the economy is working properly, what is the unemployment
rate?
A.
B.
C.
D.
0 to 3 percent
4 to 6 percent
8 to 10 percent
10 to 12 percent
Questions?
What does it mean when a person is underemployed?
A.
B.
C.
D.
The person has been working but now is laid off.
The person is looking for work in a special field.
The person is not making as much money as they need.
The person has a job but they are overqualified for it.
Questions?
What does it mean when a person is underemployed?
A.
B.
C.
D.
The person has been working but now is laid off.
The person is looking for work in a special field.
The person is not making as much money as they need.
The person has a job but they are overqualified for it.