Lesson 1: Unemployment
Learning Objective: I can explain what is meant by unemployment.
Unemployment = People of working age who are without work, available for work, and actively seeking employment.
Difficult to measure the labor force and the number of people that are unemployed..
Hidden unemployment
Unemployment = People of working age who are without work, available for work, and actively seeking employment.
- Number of people who are unemployed expressed as a % of the total labor force.
- Labor force = Economically active population.
- Children, students, stay-at-home parents, retired people... not considered to be unemployed.
Difficult to measure the labor force and the number of people that are unemployed..
- Each country has its own national system for measuring the number.
- Austria/Switzerland = registered unemployed
- Britain/Belgium = claiming unemployment benefits
Hidden unemployment
- People who have been unemployed for a long period of time and have given up the search.
- People who have part-time work but would really like to be working full time.
- People who are working in jobs for which they are greatly over-qualified.
The FED has set out to target unemployment at 3-4% http://data.bls.gov/pdq/SurveyOutputServlet Distribution of unemployment
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Using the following two sources, identify a country which has a unemployment rate above 10%:
https://en.wikipedia.org/wiki/List_of_countries_by_unemployment_rate
http://www.ilo.org/global/regions/lang--en/index.htm
https://data.oecd.org/unemp/unemployment-rate.htm
Costs of unemployment
- Consequences to the unemployed individual
- Society
- Economy as a whole
Types of unemployment:
Activity: Break into groups and create a small presentation explaining the type of employment and the corresponding solution.
- Real-wage (or classical unemployment) - Unions and government increasing minimum wage.
- Demand-deficient unemployment or cyclical unemployment - Decrease in AD.
- Equilibrium unemployment (natural unemployment) - Difference between ASL & LF.
- Frictional unemployment - Occurs when people are between jobs.
- Seasonal unemployment - Season change.
- Structural unemployment - Permanent fall in demand for a particular type of labor.
Activity: Break into groups and create a small presentation explaining the type of employment and the corresponding solution.