- Unemployment – percent of people in the labor force to want a job but are not working
Labor force – consists of the unemployed and the employed- Employed – work at least one hour a month. Temporarily absent from work. Part time workers.
- Not in the labor force – kids. Full-time students. People in mental institutions. People who are incarcerated. Retirees. Stay at home parents. Military personnel. Discouraged.
- Unemployment rate formula: 100 X number of unemployed/total labor force
- Standard unemployment rate equals 4-5%
- Types of unemployment – frictional unemployment – temporarily unemployed. Qualified with transferable skills but they aren't working. Seasonal unemployment – this is a specific type of frictional unemployment which is due to time of the year and the nature of the job. These jobs will come back. Structural unemployment- changes in the structure of the labor force make some skills obsolete. Workers don't have transferable skills and these jobs will never come back. Workers must learn new skills. The permanent loss of these jobs is called "creative destruction”. Cyclical – results from economic downturn's (recessions). As demand for goods and services falls demand for labor falls and workers are fired.
- Together they make the NRU(natural rate of unemployment)
- We are at full employment if we only have 4–5% unemployment(NRU)
- Okun’s law- . when unemployment rises 1% above natural rate, GDP falls by about 2%
Sunday, February 12, 2017
ALL ABOUT UNEMPLOYMENT
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Unit 2 included a detailed description of employment, inflation, and GDP. The skills developed on determining what is part and what is not part of GDP were also included. From the way that it is seen, GDP effects us negatively and positively. In this unit we learned to calculate GDP, and its many factors such as national income and trade. The skills I have learned from this unit will be applied to later units.
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