Unit 2 Notes:  02/04/16

Employment 

Unemployment- failure to use available resources, particularly labor, to produce desired goods and services (people not working) 

Underemployment- not using all resources 

Labor Force- anyone above 16 years of age, able and willing to work
To calculate: employed + unemployed

Net Labor Force:

1. Military
2. Students
3. Retired
4. Disabled
5. Homemakers
6. Mental Institutions
7. Prison
8. Lazy (not looking for a job)

Standard Unemployment Rate- full employment, natural rate of unemployment (NRU)

To calculate:           #of unemployed     x 100 

             # of employed + # of employed (labor force)  

Types of Unemployment

Frictional:

• Those searching for a job
• Temporarily unemployed or in between jobs
• They have transferable skills, just not working

Examples: college, high school graduates, laid off

Structural:

• change in structure of labor force made some skills obsolete
• no transferable skills, jobs may never come back
• must learn new skills in order to get a job

Example: VCR fixer

(Frictional + structural = National rate of unemployment)

Seasonal:

• Due to the time of the year and nature of the job

Example: school bus driver, lifeguard, santa clause impersonator, construction worker

Cyclical:

• Results from economic downturns, such as recessions 
• As demand falls for goods and services, demand for labor falls, workers are laid off