MacroEconomicsMacroEconomics

UnemploymentUnemployment

Mr. OdrenMr. Odren

Objective: Students will learn the 4 Objective: Students will learn the 4 different types of unemploymentdifferent types of unemployment

Stinger:Stinger:►Do you think everyone Do you think everyone

should be guaranteed should be guaranteed a job? a job? Why or why Why or why not?not?►Also, what do you Also, what do you

believe Full believe Full Employment means?Employment means?

UNEMPLOYMENT IS…UNEMPLOYMENT IS…

► SOMEONE ACTIVELY LOOKING FOR A JOB!!!SOMEONE ACTIVELY LOOKING FOR A JOB!!!►Unemployment is the inability of labor-Unemployment is the inability of labor-

force participants to find jobsforce participants to find jobs

►Unemployment has a variety of causes. Unemployment has a variety of causes. ►Some level of unemployment is expected, Some level of unemployment is expected,

even when an economy is healthy.even when an economy is healthy.

Civilian Labor ForceCivilian Labor Force

The labor force consists of all persons over The labor force consists of all persons over the age of 16 who are either working for the age of 16 who are either working for pay or actively seeking paid employmentpay or actively seeking paid employment..

UnderemployedUnderemployed: : work part-time, want full-time work part-time, want full-time or work below skill level or work below skill level

Discouraged WorkersDiscouraged Workers: People who are not : People who are not employed and not actively seeking employment employed and not actively seeking employment are not counted as part of the labor force. Called are not counted as part of the labor force. Called UnderEmployed or Discouraged UnderEmployed or Discouraged

UnderemploymentUnderemployment

Measuring UnemploymentMeasuring Unemployment►The Unemployment Rate The Unemployment Rate

Measure of unemploymentMeasure of unemployment Includes those over 16 who are not working, Includes those over 16 who are not working,

are able to work and actively seeking workare able to work and actively seeking work Does not include military, those in prison, Does not include military, those in prison,

those who are not seeking a job.those who are not seeking a job.Unemployment rate = Unemployment rate =

number of unemployed people / civilian labor forcenumber of unemployed people / civilian labor force

For example: 8,800,000 unemployed / For example: 8,800,000 unemployed / 147,000,000 civilian labor force = 6.0% 147,000,000 civilian labor force = 6.0% unemployment rate.unemployment rate.

Measuring UnemploymentMeasuring Unemployment►Full Employment Full Employment

Always some degree of Always some degree of unemployment: unemployment: ►people relocate; look for better people relocate; look for better job; can’t find appropriate job job; can’t find appropriate job

Unemployment rate of 4 to 6 percent Unemployment rate of 4 to 6 percent considered full employment in U.S.considered full employment in U.S.

►The overall economic goal of the U.S. The overall economic goal of the U.S. economy is for full employment.economy is for full employment.

1. FRICTIONAL UNEMPLOYMENT1. FRICTIONAL UNEMPLOYMENT► People “in between” jobsPeople “in between” jobs

looking for their very first joblooking for their very first job OR people that voluntarily choose to quit their OR people that voluntarily choose to quit their

jobsjobs Moving to another city, state, or countryMoving to another city, state, or country Looking for better pay or benefitsLooking for better pay or benefits

► Least serious type of unemployment out of Least serious type of unemployment out of the the four four

Question to Answer:Question to Answer:

Why is frictional unemployment Why is frictional unemployment the least serious???? the least serious????

What about its definition makes What about its definition makes it not too serious?it not too serious?

2.STRUCTUAL 2.STRUCTUAL UNEMPLOYMENTUNEMPLOYMENT

►People that lose their jobs because their People that lose their jobs because their skills are not needed skills are not needed Replaced by new technology or machinesReplaced by new technology or machines New industries requiring specialized New industries requiring specialized

education do not employ unskillededucation do not employ unskilled

►MOST SERIOUS type of unemployment MOST SERIOUS type of unemployment because they get discouraged and because they get discouraged and eventually give up looking for a jobeventually give up looking for a job

3. CYCLICAL UNEMPLOYMENT3. CYCLICAL UNEMPLOYMENT► People that lose a job because of a People that lose a job because of a

downturn in the economydownturn in the economy► They are skilled, but due to slow business, They are skilled, but due to slow business,

some people are fired during times of some people are fired during times of recessionrecession

►When the economy picks up, the can easily When the economy picks up, the can easily find a job.find a job.

4.SEASONAL UNEMPLOYMENT4.SEASONAL UNEMPLOYMENT

►People that are People that are unemployed during unemployed during certain times of the certain times of the yearyear

►These are jobs that are These are jobs that are not in demand 365 not in demand 365 days of the yeardays of the year

Impact of Unemployment on Impact of Unemployment on GDPGDP

►Remember GDP?: C+I+G+(Export-Import) Remember GDP?: C+I+G+(Export-Import) ►Lower Lower Consumer SpendingConsumer Spending►Lower Lower investmentsinvestments, causes lower capital for , causes lower capital for

new businessesnew businesses►Lower Lower ExportsExports►Lower Lower ImportsImports►Lower Lower Government spendingGovernment spending because lower because lower

tax revenuestax revenues►Lower GDP Lower GDP Contraction / Recession Contraction / Recession

Impact of UnemploymentImpact of Unemployment

►Unemployed workers are twice as likely Unemployed workers are twice as likely as their employed counterparts to as their employed counterparts to experience psychological problems experience psychological problems such as depression, anxiety, such as depression, anxiety, psychosomatic symptoms, poor self-psychosomatic symptoms, poor self-esteemesteem

►Breakdown of Family Structure Breakdown of Family Structure (Remember 30 Days Minimum Wage)(Remember 30 Days Minimum Wage)

►PovertyPoverty

►A high school student is A high school student is looking for her very first job.looking for her very first job.

►A computer technician gets A computer technician gets fired during a recession.fired during a recession.

►A teacher resigns his job A teacher resigns his job because he is moving to because he is moving to another part of state.another part of state.

►A ski instructor is out of a job A ski instructor is out of a job after the snow season is over.after the snow season is over.

►A supermarket cashier gets A supermarket cashier gets fired after the store adopts fired after the store adopts self-check out machine stands. self-check out machine stands.

►Draw a picture or comic to show the four Draw a picture or comic to show the four different types of unemployment.different types of unemployment.

►Draw pictures, stick figures, cut out Draw pictures, stick figures, cut out magazine pictures to illustrate the meaning magazine pictures to illustrate the meaning to you of each type of unemployment.to you of each type of unemployment.

► Remember, it is a basic storyboard that Remember, it is a basic storyboard that illustrates the definition of each type of illustrates the definition of each type of unemployment. unemployment.

► Finishing details…it has to be neat and Finishing details…it has to be neat and colored!!!colored!!!

►DUE DATE: End of Class DUE DATE: End of Class ► 25 points!!!25 points!!!

POINT BREAKDOWNPOINT BREAKDOWN

►5 POINTS EACH FOR THE STORYBOARD 5 POINTS EACH FOR THE STORYBOARD OF FRICTIONAL, STRUCTURAL, OF FRICTIONAL, STRUCTURAL, CYCLICAL AND SEASONAL CYCLICAL AND SEASONAL UNEMPLOYMENTUNEMPLOYMENT

►5 POINTS FOR OVERALL NEATNESS, 5 POINTS FOR OVERALL NEATNESS, CREATIVITY, COLOR, ETC…CREATIVITY, COLOR, ETC…