Unemployment
Unemployment is defined as the state of being unemployed. When an individual is actively searching for work but is unable to find a job they are considered unemployed. The unemployment rate has an effect on the overall US economy. The unemployment rate is usually a good measure of how healthy the economy is. That is if its low the economy is doing well with jobs, if the unemployment rate is high generally the economy isn’t doing so hot. The unemployment rate is measured by the number of unemployed people divided by the total number of people in the labor force.
There are a lot of different variations when considering the unemployment rate and who is considered an unemployed person and who is considered a part of the work force. For example, the US Bureau of Labor Statists cites the U-3 unemployment rate as the official unemployment rate, but this definition of unemployment does not consider people who are looking for a job in a tough rescission and get discouraged and no longer look for work. …show more content…
Various ideas different among the definition of unemployment between economists. Keynesian economics believe that there is a natural rate of unemployment because the skills of people and the positions available don’t always match up. In addition, Neoclassical economics believe that the labor market is efficient if it is always left alone, but laws like minimum wage and unions take the balance and through it off, making jobs unavailable for some people causing unemployment.
In addition, to different variations about the unemployment rate, there are also three different types of unemployment. They are structural, frictional and cyclical unemployment. Structural unemployment depends primarily on the needs of the economy and the changes the economy is undergoing. It is associated with the people with mismatch of jobs and people due to the lack of skills or they are in the wrong area of work. For example, when there are new machines to help make cars or in other words advancement in technology, people get laid off because now these machines can assemble the cars. Basically its people who find themselves in a situation which they need to acquire new skills to get a new job. The next type of unemployment is frictional unemployment, which is a constant in the economy. This is a result of transitions made by people who are in between jobs. Frictional unemployment is related to structural unemployment due to its dependence on the dynamics of the economy. Frictional unemployment is mainly a cause of people not taking the first job they are offered. One of the reasons they don’t take it is because of the wages they are offered or because of the necessary skills they need. This type of unemployment is also caused by businesses that fail or when someone has poor job performance. One other cause of frictional unemployment is when people move across country and are in between jobs. To give a specific example of frictional unemployment is when a student quits their job at Mc Donald’s to find a job after they graduate college. The main difference between frictional unemployment is that frictional unemployment is not long term. Lastly is cyclical unemployment. This is attributed to economic contraction. The economy has the means to make jobs which in turn increases economic growth. Therefore when there’s an expanding economy there is most likely an increase in economic growth.
Unemployment is defined as the state of being unemployed. When an individual is actively searching for work but is unable to find a job they are considered unemployed. The unemployment rate has an effect on the overall US economy. The unemployment rate is usually a good measure of how healthy the economy is. That is if its low the economy is doing well with jobs, if the unemployment rate is high generally the economy isn’t doing so hot. The unemployment rate is measured by the number of unemployed people divided by the total number of people in the labor force.
There are a lot of different variations when considering the unemployment rate and who is considered an unemployed person and who is considered a part of the work force. For example, the US Bureau of Labor Statists cites the U-3 unemployment rate as the official unemployment rate, but this definition of unemployment does not consider people who are looking for a job in a tough rescission and get discouraged and no longer look for work. …show more content…
Various ideas different among the definition of unemployment between economists. Keynesian economics believe that there is a natural rate of unemployment because the skills of people and the positions available don’t always match up. In addition, Neoclassical economics believe that the labor market is efficient if it is always left alone, but laws like minimum wage and unions take the balance and through it off, making jobs unavailable for some people causing unemployment.
In addition, to different variations about the unemployment rate, there are also three different types of unemployment. They are structural, frictional and cyclical unemployment. Structural unemployment depends primarily on the needs of the economy and the changes the economy is undergoing. It is associated with the people with mismatch of jobs and people due to the lack of skills or they are in the wrong area of work. For example, when there are new machines to help make cars or in other words advancement in technology, people get laid off because now these machines can assemble the cars. Basically its people who find themselves in a situation which they need to acquire new skills to get a new job. The next type of unemployment is frictional unemployment, which is a constant in the economy. This is a result of transitions made by people who are in between jobs. Frictional unemployment is related to structural unemployment due to its dependence on the dynamics of the economy. Frictional unemployment is mainly a cause of people not taking the first job they are offered. One of the reasons they don’t take it is because of the wages they are offered or because of the necessary skills they need. This type of unemployment is also caused by businesses that fail or when someone has poor job performance. One other cause of frictional unemployment is when people move across country and are in between jobs. To give a specific example of frictional unemployment is when a student quits their job at Mc Donald’s to find a job after they graduate college. The main difference between frictional unemployment is that frictional unemployment is not long term. Lastly is cyclical unemployment. This is attributed to economic contraction. The economy has the means to make jobs which in turn increases economic growth. Therefore when there’s an expanding economy there is most likely an increase in economic growth.