1. CHAPTER 11: ECONOMIC CHALLENGES
SECTION 1: UNEMPLOYMENT
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2. UNEMPLOYMENT HIGH RATES OF UNEMPLOYMENT HURTS THE ECONOMY
The nation loses the goods and services that the unemployed would produce if they were working
Businesses lose sales because the unemployed cannot buy as many products

3. IDENTIFYING THE EMPLOYED & UNEMPLOYED
US Census Bureau
Considered Employed if: worked for pay or profit one or more hours, worked without pay in a family business 15 or more hours, have jobs but did not work because of illness, weather, vacations, or labor disputes

4. UNEMPLOYMENT RATE
The most closely watched and highly publicized labor force statistic
It is the percentage of people in the civilian labor force who are unemployed
Unemployment is higher during a recession

5. UNEMPLOYMENT RATE PROBLEMS
Unemployment rate does not measure all aspects of unemployment
Does not indicate the differences in intensity with which people look for jobs

6. UNEMPLOYMENT RATE PROBLEMS
2. Excludes some individuals who most people would think of as unemployed
Marginally attached workers: once held productive jobs but have given up looking for work
Discouraged workers: people who want a job but have stopped looking for work for job-related reasons

7. UNEMPLOYMENT RATE PROBLEMS
3. Does not indicate the number of underemployed workers. Workers who have jobs beneath their skill level or who want full-time work but are only able to find part-time jobs these people are considered UNDEREMPLOYED

8. DETERMINING FULL EMPLOYMENT
DOES NOT MEAN EVERYONE HAS A JOB AND THE UNEMPLOYMENT RATE IS ZERO
UNEMPLOYMENT RATE AT ABOUT 5% WOULD BE CONSIDERED FULL EMPOLYMENT

9. TYPES OF UNEMPLOYMENT
FRICTIONAL
STRUCTURAL
SEASONAL
CYCLICAL

10. TYPES OF UNEMPLOYMENT
Frictional: in-between jobs – person leaves job to find another job, during that person’s search he or she is considered frictionally unemployed

11. TYPES OF UNEMPLOYMENT
2. Structural: unemployment as a result of changes in technology or in the way the economy is structured. Example - Machines take jobs away or people do not want product anymore
Example: some industries decline and even disappear as natural resources in a region are used up

12. TYPES OF UNEMPLOYMENT
Seasonal: job depends on season
FARMER

13. CYCLICAL UNEMPLOYMENT
Cyclical: unemployment resulting from recessions and economic downturns.
Harms economy more than any other type of unemployment (when sales decline producers tend to decrease output & lay off workers
Then as economy expands demand for goods and services expand and producers hire more workers to increase output