UNEMPLOYMENT

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UNEMPLOYMENT
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Measuring

• Bureau of Labor Current Population Survey
• unemployed / civilian labor force x 100
  unemployment rate
• Who is the civilian labor force? YOU!
• Ex. 6.4 million unemployed/141.7 million in
  civilian labor force x 100
• 6.4/141.7.045
• .045 x 100 4.5

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Types of Unemployment

• 1. FRICTIONAL
• taking time to find a job Good
  thing

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Seasonal Unemployment

• Slow/shut down
• during seasonal shifts
• Summer jobs,
• agriculture

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Structural Unemployment

• Skills no longer match the
• Available jobs
• 5 Causes
• Technology
• New resources
• Changes in demand
• Globalization
• Lack of Education
• Job Training

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Cyclical Unemployment

• Unemployment that fluctuates with the business
  cycle
• Great Depression
• 1 in 4 unemployed
• Jobless for years
• Social Security Act 1935
• Discouraged Workers

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Underemployment
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Full Employment

• A.K.A. Natural Rate of Unemployment
• 4-6 rate of Unemployment
• Domestic Output of the Natural Rate of
  Unemployment Potential Output
• Is ZERO unemployment a good thing?

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Unequal Unemployment

• Average length of unemployment in U.S. 18.4 wks
• 19.1weeks 17.6 weeks
• By race By education
• 1. Latinos- 16 wks 1. PHD- 1.6
• 2. Whites- 17 wks 2. BA/BS- 2.6
• 3. Blacks- 22.6 wks 3. Some coll- 4.2
• 4. Asians- 23.3 wks 4. Some hs- 7.6
• Noneconomic factors-
• depression
• political action

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INFLATION
Rising price level (average) Consumer Price
Index prices of a market basket of some 300
consumer goods and services purchased by a
typical urban consumer Medical, transportation,
food, housing, entertainment, education, other
GS Inflation rate rate of change over
time Reduces purchasing power
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Types of Inflation

• Inflation between 1-3
• Hyperinflation OUT OF CONTROL 50 increase
• 1923 Germany
• Deflation sustained drop in price level
• Disinflation goods and services increasing at a
  slower rate

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Causes of Inflation

• 1) Demand-pull (AD up) too much spending
  chasing too few goods
• Wage-price spiral
• 2) Cost-push (AS down) increase cost production
• (? recession? eventually costs back down?
  recovery)
• 3) Quantity theory too many dollar bills