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The Unemployment Rate = the number unemployed divided by the workforce.

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Presentation on theme: "The Unemployment Rate = the number unemployed divided by the workforce."— Presentation transcript:

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2 The Unemployment Rate = the number unemployed divided by the workforce.

3 Workforce = 200M, 20M are unemployed, the URate = 10% 150M, 30M are unemployed, URate = _________ 100M, 5M are unemployed, URate = __________

4 What is acceptable? Up to 6%

5 What is acceptable? Up to 6% What is considered full employment? About 4.5% URate, no cyclical unemployment, All factors of Production (LLC) in use.

6 Start with the total population of the US. Subtract those under 16 Subtract those in the military Subtract those institutionalized

7 This leaves the Non Institutional Adult population. Subtract those retired and receiving retirement funds Subtract homemakers Subtract full time students over 16 Subtract the discouraged

8 This leaves the Civilian Labor Force Count full time workers (40 hrs. per week) Count part time workers (15-39 hrs per week) Count unpaid family business workers (part of the family) Count those on sick leave, strike, vacation Subtract those looking but not finding, changing careers, etc.

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10 Frictional: Someone is between jobs, about to start one-always present. Example: Rene just graduated college and is looking for a job. Example: Fabian just ended his tour in the military and is looking for a job as a Mercenary for the Government.

11 Seasonal : due to climate…more prevalent in the Northern climates Example: Fabiolas job as an Ice Road Trucker closes during the summer. Example: Andres roofing business closes for the winter.

12 Cyclical: results from swings in the business cycle- not present during full employment Example: Jerry loses his job drawing doodles because demand for drawings is low. Example: Gabby loses her job because business is too slow at Spanky McGees Gift Emporium.

13 Structural: due to a change in industry, or a new technology Example: Davids VCR repair shop closes.

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15 1. hidden unemployment or discouraged worker. This is the worker who is no longer looking for a job so he would not be included with the unemployment number. This worker is still a problem for the economy. We are not using this labor resource efficiently. ©2012, TESCCC

16 2. under employment- workers skills do not match jobs. The worker is overqualified for a job or working at a job below their skills. This could be a person with a masters degree in English who is working as a waiter. Again, we are not using this labor resource efficiently. Causes unemployment numbers to be understated ©2012, TESCCC

17 Economic Impact of unemployment is that our standard of living goes down and the economy faces an economic slowdown. ©2012, TESCCC


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