UNEMPLOYMENT

- Failure to use available resources particularly labor to produce desired goods and services.

Unemployment Rate

- Ideal unemployment rate is (4-5%) which means full employment or natural rate of unemployment   (NRU).

Labor Force

- Above 16 years old.
- Able and willing to work.

Not in the Labor Force

- Military.
- Jail/ Prison.
- Mental institutions.
- Retired People.
- Students.
- Homemakers.
- People who are not looking for a job.

How to Calculate Unemployment

- (# of unemployed people/ # of employed people + # of unemployed people) 100.

Types Of Unemployment

Frictional

- Temporarily unemployed or in between jobs.
- Recent high school graduate.
- Better position.

Structural

- Workers do not have transferable skills and these jobs will never come back.

Seasonal

- Unemployment due to the time of the year and nature of the job.
- Bus drivers, Santa Claus impersonator.

Cyclical

- Results from economic downturns.
- As demand for goods and services fall, demand for labor also fall.
- Full employment means no cyclical employment.