Economics
Unemployment
Unemployment refers to the condition of individuals who are willing and able to work but are unable to find employment. It is a key indicator of the health of an economy and is typically measured as a percentage of the labor force. High levels of unemployment can lead to reduced consumer spending, lower economic growth, and social issues.
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8 Key excerpts on "Unemployment"
- Steven A. Greenlaw, Timothy Taylor, David Shapiro(Authors)
- 2017(Publication Date)
- Openstax(Publisher)
but who do not have jobs KEY CONCEPTS AND SUMMARY 7.1 How Economists Define and Compute Unemployment Rate Unemployment imposes high costs. Unemployed individuals suffer from loss of income and from stress. An economy with high Unemployment suffers an opportunity cost of unused resources. We can divide the adult population into those in the labor force and those out of the labor force. In turn, we divide those in the labor force into employed and unemployed. A person without a job must be willing and able to work and actively looking for work to be counted as unemployed; otherwise, a person without a job is counted as out of the labor force. Economists define the Unemployment rate as the number of unemployed persons divided by the number of persons in the labor force (not the overall adult population). The Current Population Survey (CPS) conducted by the United States Census Bureau measures the percentage of the labor force that is unemployed. The establishment payroll survey by the Bureau of Labor Statistics measures the net change in jobs created for the month. 7.2 Patterns of Unemployment The U.S. Unemployment rate rises during periods of recession and depression, but falls back to the range of 4% to 186 Chapter 7 | Unemployment This OpenStax book is available for free at http://cnx.org/content/col23729/1.3 6% when the economy is strong. The Unemployment rate never falls to zero. Despite enormous growth in the size of the U.S. population and labor force in the twentieth century, along with other major trends like globalization and new technology, the Unemployment rate shows no long-term rising trend. Unemployment rates differ by group: higher for African-Americans and Hispanics than for whites; higher for less educated than more educated; higher for the young than the middle-aged. Women’s Unemployment rates used to be higher than men’s, but in recent years men’s and women’s Unemployment rates have been very similar.
eBook - PDF- Steven A. Greenlaw, Timothy Taylor, David Shapiro(Authors)
- 2017(Publication Date)
- Openstax(Publisher)
The human costs of Unemployment alone would justify making a low level of Unemployment an important public policy priority. However, Unemployment also includes economic costs to the broader society. When millions of unemployed but willing workers cannot find jobs, economic resource are unused. An economy with high Unemployment is like a company operating with a functional but unused factory. The opportunity cost of Unemployment is the output that the unemployed workers could have produced. This chapter will discuss how economists define and compute the Unemployment rate. It will examine the patterns of Unemployment over time, for the U.S. economy as a whole, for different demographic groups in the U.S. economy, and for other countries. It will then consider an economic explanation for Unemployment, and how it explains the patterns of Unemployment and suggests public policies for reducing it. 21.1 | How Economists Define and Compute Unemployment Rate By the end of this section, you will be able to: • Calculate the labor force participation rate and the Unemployment rate • Explain hidden Unemployment and what it means to be in or out of the labor force • Evaluate the collection and interpretation of Unemployment data Newspaper or television reports typically describe Unemployment as a percentage or a rate. A recent report might have said, for example, from August 2009 to November 2009, the U.S. Unemployment rate rose from 9.7% to 10.0%, but by June 2010, it had fallen to 9.5%. At a glance, the changes between the percentages may seem small. However, remember that the U.S. economy has about 160 million adults (as of the beginning of 2017) who either have jobs or are looking for them. A rise or fall of just 0.1% in the Unemployment rate of 160 million potential workers translates into 160,000 people, which is roughly the total population of a city like Syracuse, New York, Brownsville, Texas, or Pasadena, California.
eBook - PDF- Steven A. Greenlaw, Timothy Taylor, David Shapiro(Authors)
- 2017(Publication Date)
- Openstax(Publisher)
The human costs of Unemployment alone would justify making a low level of Unemployment an important public policy priority. However, Unemployment also includes economic costs to the broader society. When millions of unemployed but willing workers cannot find jobs, economic resource are unused. An economy with high Unemployment is like a company operating with a functional but unused factory. The opportunity cost of Unemployment is the output that the unemployed workers could have produced. This chapter will discuss how economists define and compute the Unemployment rate. It will examine the patterns of Unemployment over time, for the U.S. economy as a whole, for different demographic groups in the U.S. economy, and for other countries. It will then consider an economic explanation for Unemployment, and how it explains the patterns of Unemployment and suggests public policies for reducing it. 8.1 | How Economists Define and Compute Unemployment Rate By the end of this section, you will be able to: • Calculate the labor force participation rate and the Unemployment rate • Explain hidden Unemployment and what it means to be in or out of the labor force • Evaluate the collection and interpretation of Unemployment data Newspaper or television reports typically describe Unemployment as a percentage or a rate. A recent report might have said, for example, from August 2009 to November 2009, the U.S. Unemployment rate rose from 9.7% to 10.0%, but by June 2010, it had fallen to 9.5%. At a glance, the changes between the percentages may seem small. However, remember that the U.S. economy has about 160 million adults (as of the beginning of 2017) who either have jobs or are looking for them. A rise or fall of just 0.1% in the Unemployment rate of 160 million potential workers translates into 160,000 people, which is roughly the total population of a city like Syracuse, New York, Brownsville, Texas, or Pasadena, California.
eBook - PDF- Steven A. Greenlaw, David Shapiro, Daniel MacDonald(Authors)
- 2022(Publication Date)
- Openstax(Publisher)
but who do not have jobs Key Concepts and Summary 21.1 How Economists Define and Compute Unemployment Rate Unemployment imposes high costs. Unemployed individuals experience loss of income and stress. An economy with high Unemployment suffers an opportunity cost of unused resources. We can divide the adult population into those in the labor force and those out of the labor force. In turn, we divide those in the labor force into employed and unemployed. A person without a job must be willing and able to work and actively looking for work to be counted as unemployed; otherwise, a person without a job is counted as out of the labor force. Economists define the Unemployment rate as the number of unemployed persons divided by the number of persons in the labor force (not the overall adult population). The Current Population Survey (CPS) conducted by the United States Census Bureau measures the percentage of the labor force that is unemployed. The establishment payroll survey by the Bureau of Labor Statistics measures the net change in jobs created for the month. 21.2 Patterns of Unemployment The U.S. Unemployment rate rises during periods of recession and depression, but falls back to the range of 4% to 6% when the economy is strong. The Unemployment rate never falls to zero. Despite enormous growth in the size of the U.S. population and labor force in the twentieth century, along with other major trends like globalization and new technology, the Unemployment rate shows no long-term rising trend. Unemployment rates differ by group: higher for African-Americans and Hispanic people than for White people; higher for less educated than more educated; higher for the young than the middle-aged. Women’s Unemployment rates used to be higher than men’s, but in recent years men’s and women’s Unemployment 524 21 • Key Terms Access for free at openstax.org
eBook - PDF- David Shapiro, Daniel MacDonald, Steven A. Greenlaw(Authors)
- 2022(Publication Date)
- Openstax(Publisher)
but who do not have jobs Key Concepts and Summary 8.1 How Economists Define and Compute Unemployment Rate Unemployment imposes high costs. Unemployed individuals experience loss of income and stress. An economy with high Unemployment suffers an opportunity cost of unused resources. We can divide the adult population into those in the labor force and those out of the labor force. In turn, we divide those in the labor force into employed and unemployed. A person without a job must be willing and able to work and actively looking for work to be counted as unemployed; otherwise, a person without a job is counted as out of the labor force. Economists define the Unemployment rate as the number of unemployed persons divided by the number of persons in the labor force (not the overall adult population). The Current Population Survey (CPS) conducted by the United States Census Bureau measures the percentage of the labor force that is unemployed. The establishment payroll survey by the Bureau of Labor Statistics measures the net change in jobs created for the month. 8.2 Patterns of Unemployment The U.S. Unemployment rate rises during periods of recession and depression, but falls back to the range of 4% to 6% when the economy is strong. The Unemployment rate never falls to zero. Despite enormous growth in the size of the U.S. population and labor force in the twentieth century, along with other major trends like globalization and new technology, the Unemployment rate shows no long-term rising trend. Unemployment rates differ by group: higher for African-Americans and Hispanic people than for White people; higher for less educated than more educated; higher for the young than the middle-aged. Women’s Unemployment rates used to be higher than men’s, but in recent years men’s and women’s Unemployment 214 8 • Key Terms Access for free at openstax.org
No longer available |Learn more- (Author)
- 2014(Publication Date)
- White Word Publications(Publisher)
____________________ WORLD TECHNOLOGIES ____________________ Chapter-6 Unemployment World Unemployment rates as of January 2009 Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively looked for work within the past four weeks. The Unemployment rate is a measure of the prevalence of Unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labour force. There remains considerable theoretical debate regarding the causes, consequences and solutions for Unemployment. Classical, neoclassical and the Austrian School of econo-mics focus on market mechanisms and rely on the invisible hand of the market to resolve Unemployment. These theories argue against interventions imposed on the labour market from the outside, such as unionization, minimum wage laws, taxes, and other regulations that they claim discourage the hiring of workers. Keynesian economics emphasizes the cyclical nature of Unemployment and potential interventions to reduce Unemployment during recessions. These arguments focus on recurrent supply shocks that suddenly reduce aggregate demand for goods and services and thus reduce demand for workers. Keynesian models recommend government interventions designed to increase demand ____________________ WORLD TECHNOLOGIES ____________________ for workers; these can include financial stimuli, job creation, and expansionist monetary policies. Marxism focuses on the relations between the controlling owners and the subordinated proletariat whom the owners pit against one another in a constant struggle for jobs and higher wages. This struggle and the Unemployment it produces benefit the system by reducing wage costs for the owners. For Marxists the causes of and solutions to Unemployment require abolishing capitalism and shifting to socialism or communism.
- G.C. Harcourt(Author)
- 2019(Publication Date)
- Routledge(Publisher)
11 An Aspect of the Economic Role of Unemployment R. E. Hall MASSACHUSETTS INSTITUTE OF TECHNOLOGY INTRODUCTION Economic thought on the role of Unemployment has evolved in the past decade from the view that Unemployment is a simple waste of resources to the view that at least some Unemployment is privately and socially beneficial because it yields a better match between jobs and workers. The papers by Phelps, Holt, and Mortensen in the famous volume, Microeconomic Founda-tions of Employment and Inflation Theory (1970) have been especially influential in bringing about this change in thinking. The literature on the microeconomics of Unemployment has not settled the issue of the optimality of the equilibrium level of Unemployment present in an unfettered competitive economy. The extreme view that the private and social costs and benefits are precisely equal is not widely held. In his thoughtful review of the subject (Tobin, 1972), James Tobin has observed that the process of job search involves externalities associated with congestion and queuing, but is uncertain 'whether the market is biased toward excessive or inadequate search' (p. 8). My purpose in this paper is to study one specific externality in considerable microeconomic detail. The externality arises from the effect of Unemployment in the market on the hiring and firing policies of employers. Earlier empirical work of mine has suggested the following hypothesis, which Arthur Okun has picturesquely called the 'spare tyre theory': firms in chronically tight labour markets try to minimise turnover by holding overhead labour during temporary reductions in demands for their products. The costs of recruiting in tight markets motivates this policy. In chronically slack markets, on the other hand, firms treat the unemployed as a readily available buffer stock from which they can draw whenever labour is needed. They do not hold overhead labour because recruiting labour when it is needed is inexpensive.
eBook - PDFThe Path to a Modern Economics
Dealing with the Complexity of Economic Systems
- Henning Schwardt(Author)
- 2017(Publication Date)
- Palgrave Macmillan(Publisher)
4 Unemployment as Economic Crises Market functioning and function, at the individual as well as at the social levels, and the other themes discussed in the preceding chapters provide one large area for economic analyses. The entire economy, i.e., the sum total of recorded economic activity within a modern nation state, is the other central area of such analyses. Specifically, the overall resource employment instead of the resource allocation to individual production processes, or the changes in the overall economy-wide price level instead of the price in a single market, are among the aspects of concern. In distinction to the microeconomic focus on individuals and markets, this area of analyses in economics is referred to as macroeconomics. A way to distinguish perspectives on such entire economies is also based on the general assumptions about the nature of economic sys- tems. Some economists work with homogeneous entities, while others disaggregate the whole and integrate different groups with a potential to tilt an outcome of a situation to their favor. Some work with an equilibrium framework, while others work with a view of economy as a constantly changing system. We can continue to think of the broad perspectives in terms of top-down and bottom-up formulations, with the overall economic system showing certain given characteristics in © The Author(s) 2017 H. Schwardt, The Path to a Modern Economics, DOI 10.1007/978-3-319-52785-7_4 167 one case, or with characteristics emerging from the, potentially diverse, behaviors of agents. A central issue that arises from the different sets of assumptions concerns crises in economies. We will label the under- and unemploy- ment of resources on the economy level a crisis.
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