the unemployment rate = the number unemployed divided by the workforce
TRANSCRIPT
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Unemployment
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The Unemployment Rate = the number unemployed divided by the workforce.
Unemployment Rate
UNEMPLOYED/WORKFORCE
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Workforce = 200M, 20M are unemployed, the URate =
10% 150M, 30M are unemployed, URate = _________
100M, 5M are unemployed, URate = __________
Unemployment Rate (URate)
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What is acceptable?Up to 6%
Unemployment Rate
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What is acceptable?Up to 6%
What is considered “full employment”?About 4.5% URate, no cyclical unemployment, All factors of Production (LLC) in use.
Unemployment Rate
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Start with the total population of the US.Subtract those under 16Subtract those in the military
Subtract those “institutionalized”
Employment Statistics
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This leaves the “Non Institutional Adult” population.Subtract those retired and receiving retirement funds
Subtract homemakersSubtract full time students over 16
Subtract the “discouraged”
Employment Statistics
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This leaves the “Civilian Labor Force”Count full time workers (40 hrs. per
week)Count part time workers (15-39 hrs per
week)Count “unpaid” family business workers
(part of the family)Count those on sick leave, strike, vacationSubtract those looking but not finding,
changing careers, etc.
Employment Statistics
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Frictional: Someone is between jobs, about to start one-always present.
Example: Rene just graduated college and is looking for a job.
Example: Fabian just ended his tour in the military and is looking for a job as a Mercenary for the Government.
Types of
Unemployment
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Seasonal: due to climate…more prevalent in the Northern climates
Example: Fabiola’s job as an Ice Road Trucker closes during the summer.
Example: Andre’s roofing business closes for the winter.
Types of
Unemployment
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Cyclical: results from swings in the business cycle-not present during full employment
Example: Jerry loses his job drawing doodles because demand for drawings is low.
Example: Gabby loses her job because business is too slow at Spanky McGee’s Gift Emporium.
Types of
Unemployment
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Structural: due to a change in industry, or a new technology
Example: David’s VCR repair shop closes.
Types of
Unemployment
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What are the problems with unemployment figures?
1. hidden unemployment or discouraged worker. This is the worker who is no longer looking for a job so he would not be included with the unemployment number. This worker is still a problem for the economy. We are not using this labor resource efficiently.
©2012, TESCCC
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Problems with the unemployment figures
2. under employment- worker’s skills do not match jobs. The worker is overqualified for a job or working at a job below their skills. This could be a person with a master’s degree in English who is working as a waiter. Again, we are not using this labor resource efficiently.
Causes unemployment numbers to be understated©2012, TESCCC
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Economic Impact of unemployment is that our standard of living goes down and the economy faces an economic slowdown.
©2012, TESCCC