1. Copyright © 2004 South-Western 28 Unemployment and Its Natural Rate Atvinnuleysi og hversu eðlilegt það er

2. Copyright © 2004 South-Western IDENTIFYING UNEMPLOYMENT Categories of Unemployment Skipting atvinnuleysis The problem of unemployment is usually divided into two categories. Atvinnuleysisvandamálið skiptist almennt í tvennt. The long-run problem and the short-run problem: Langtíma og skammtímavandamál The natural rate of unemployment Eðlilegt atvinnuleysi The cyclical rate of unemployment Árstímabundið atvinnuleysi

3. Copyright © 2004 South-Western IDENTIFYING UNEMPLOYMENT Natural Rate of Unemployment Eðlilegt atvinnuleysi The natural rate of unemployment is unemployment that does not go away on its own even in the long run. (Atvinnleysi sem hverfur ekki af sjálfsdáðun, jafnvel ekki til langs tíma). It is the amount of unemployment that the economy normally experiences. (Það er það atvinnuleysissig sem hagkerfis stendur almennt frammi fyrir).

4. Copyright © 2004 South-Western IDENTIFYING UNEMPLOYMENT Cyclical Unemployment Sveiflubundið atvinnuleysi Cyclical unemployment refers to the year-to- year fluctuations in unemployment around its natural rate. It is associated with with short-term ups and downs of the business cycle. (Tengist skammtíma hæðum og lægðum í hagsveiflu).

5. Copyright © 2004 South-Western How Is Unemployment Measured? The unemployment rate is calculated as the percentage of the labor force that is unemployed. (Atvinnuleysi er reiknað sem hlutfallsprósenta vinnuaflans sem er án atvinnu)

6. Table 1 The Labor-Market Experiences of Various Demographic Groups Copyright©2004 South-Western

7. Figure 2 Unemployment Rate Since 1960 Copyright©2003 Southwestern/Thomson Learning 10 8 6 4 2 0 19701975196019651980198519902005 Percent of Labor Force 19952000 Natural rate of unemployment Unemployment rate

8. Figure 3 Labor Force Participation Rates for Men and Women Since 1950 Copyright©2003 Southwestern/Thomson Learning 100 80 60 40 20 0 1950195519601965197019751980198519902000 Labor-Force Participation Rate (in percent) Women Men 1995

9. Copyright © 2004 South-Western Why Are There Always Some People Unemployed? In an ideal labor market, wages would adjust to balance the supply and demand for labor, ensuring that all workers would be fully employed.

10. Copyright © 2004 South-Western Why Are There Always Some People Unemployed? Frictional unemployment (atvinnuleysi vegna starfaskipta) refers to the unemployment that results from the time that it takes to match workers with jobs. In other words, it takes time for workers to search for the jobs that are best suit their tastes and skills. (Á við um það atvinnuleysi sem hlýst af því að tíma tekur fyrir vinnuafl að sækja í þá vinnu sem best hentar smekk þeirra og hæfileikum).

11. Copyright © 2004 South-Western Why Are There Always Some People Unemployed? Structural unemployment is the unemployment that results because the number of jobs available in some labor markets is insufficient to provide a job for everyone who wants one. (Kerfisbundið atvinnuleysi er það atvinnuleysi sem hlýst af því sá fjöldi starfa sem býðst á vinnumarkaði dugir ekki til að útvega öllum störf sem vilja starfa).

12. Copyright © 2004 South-Western MINIMUM-WAGE LAWS When the minimum wage is set above the level that balances supply and demand, it creates unemployment. (Ef lágmarkslaun eru sett ofar því stigi sem myndar jafnvægi framboðs og eftirspurnar vinnuafls, þá skapar það atvinnuleysi).

13. Figure 4 Unemployment from a Wage Above the Equilibrium Level Copyright©2003 Southwestern/Thomson Learning Quantity of Labor 0 Surplus of labor = Unemployment Labor supply Labor demand Wage Minimum wage LDLD LSLS WEWE LELE

14. Copyright © 2004 South-Western THE THEORY OF EFFICIENCY WAGES Efficiency wages are above-equilibrium wages paid by firms in order to increase worker productivity. (Skilvirknislaun eru hærri en jafnvægislaun sem fyrirtæki bjóða til að auka framleiðni vinnuafls.) The theory of efficiency wages states that firms operate more efficiently if wages are above the equilibrium level. (Kenningin um skilvirknislaun segir að fyrirtæki starfi á skilvirkari hátt ef laun eru fyrir ofan jafnvægisstigið).