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Unemployment

Unemployment. What is Unemployment? . People 16 and older who looked for work in the past 30 days People not looking for work are NOT unemployed (they just don’t have a job). Two Categories of People. Not in labor force – those people not looking for work Stay at home mom Retiree Jail

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Unemployment

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  1. Unemployment

  2. What is Unemployment? • People 16 and older who looked for work in the past 30 days • People not looking for work are NOT unemployed (they just don’t have a job)

  3. Two Categories of People • Not in labor force – those people not looking for work • Stay at home mom • Retiree • Jail • In labor force – employed and unemployed

  4. Four Types of Unemployment • Frictional – temporarily between jobs • Cyclical – people without jobs because firms do not need their labor because of a downturn in business cycle • Structural – mismatch between job seekers and opening (lack of skills/education) • Seasonal- unemployment that occurs as a result of harvest schedules of vacations, or when industries slow or shut down for a season

  5. Unemployment Rate • Number unemployed/total number in labor force • How can the unemployment rate rise when more people are getting jobs?

  6. What Kind of Unemployment • A computer programmer is laid off because of a recession. • A literary editor leaves her job in New York to look for a new job in San Francisco. • An unemployed college graduate is looking for his first job. • Advances in technology make the assembly-line worker’s job obsolete. • Slumping sales lead to the cashier being laid off. • An individual refuses to work for minimum wage. • A high school graduate lacks the skills necessary for a particular job. • Workers are laid off when the local manufacturing plant closes because the product made there is not selling. • A skilled glass blower becomes unemployed when a new machine does her job faster.

  7. Aggregate Demand

  8. Aggregate Demand • Total demand for final goods and services • Consumption, Government spending, Investment, and Net Exports (sound familiar?)

  9. Unemployment Poster Assignment • Define each type of unemployment in your own words, give us at least one example, and illustrate your definition.

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