unit 3.16

Bell-work

  • Question posed: Why do you think it is hard for teenagers to get jobs?

Chapter 16: Unemployment

Definition of Unemployment

  • Unemployment refers to individuals who are willing and able to work and are actively seeking work, but who do not currently work.

Unemployment Rates

Rate of Unemployment (% Breakdown)

  • Unemployment percentages are categorized as follows:

    • 95-100%

    • 90-94.9%

    • 85-89.9%

    • 80-84.9%

    • 75-79.9%

    • 70-74.9%

    • 65-69.9%

    • 60-64.9%

    • 55-59.9%

    • 50-54.9%

    • 45-49.9%

    • 40-44.9%

    • 35-39.9%

    • 30-34.9%

    • 25-29.9%

    • 20-24.9%

    • 15-19.9%

    • 10-14.9%

    • 5-9.9%

    • 0-4.9%

    • No data available

Historical Unemployment Rate (1890-2008)

  • The unemployment rate in the United States has varied significantly from 1890 to 2008. Key data points include:

    • Peak unemployment recorded in the historical timeline, often tied to economic events (e.g., Great Depression, post-war periods).

  • Graphically represented in a chart spanning years from 1890 to 2008.

Employment Statistics

Net Change in Employment Per Month

  • Change documented in thousands of jobs created or lost on a monthly basis from January 2009 to January 2017:

    • Positive values indicate job creation.

    • Negative values indicate job loss.

    • Notable variations in the unemployment rate.

Measuring Unemployment

Unemployment Rate Formula

  • The unemployment rate is calculated using the formula:
    Unemployment Rate=Number UnemployedNumber in Civilian Labor Force×100\text{Unemployment Rate} = \frac{\text{Number Unemployed}}{\text{Number in Civilian Labor Force}} \times 100

Exclusions from Unemployment Statistics

Individuals Not Counted as Unemployed

  • Categories of individuals excluded from unemployment statistics:

    • Not of employable age

    • Unable to work due to illness or disability

    • Members of the armed services

    • Incarcerated individuals or committed individuals

    • Willfully not seeking work

Individuals Not Counted as Unemployed but are Underemployed

  • Underemployed by qualification (not using full skills)

  • Underemployed by wage (earning less than they are qualified for)

  • Disheartened individuals who have ceased looking for work.

Recent Unemployment Analysis

Overall Trends

  • The unemployment rate fell again in recent years but does not tell the complete story, as highlighted through various statistics:

    • Indicates shifts in labor force participation rate, especially among historically marginalized groups.

U3 vs. U6 Unemployment

  • U3: Official unemployment rate, reflects those actively looking for jobs.

  • U6: Broader measure that includes underemployment and those who have given up looking for work.

Unemployment Rate vs. Labor Force Participation Rate

  • Comparative statistics show the relationship between unemployment rates and the labor force participation rates over the years, visualized in a graph.

Regional Specifics

Unemployment Rates by County (2021)

  • Unemployment rates vary by county:

    • 8.0% or higher

    • 7.0% to 7.9%

    • 6.0% to 6.9%

    • 5.0% to 5.9%

    • 4.0% to 4.9%

    • 3.0% to 3.9%

    • U.S. average rate for comparison: 5.3%

Racial Bias in Employment Data

  • Data highlights that Native Americans have faced economic stressors at higher rates compared to other racial groups. Statistical analysis showed:

    • Households experiencing detrimental conditions, including job losses and reduced work hours, with comparisons across racial lines.

Employment Losses During Recessions

  • Comparison of payroll job losses during various recessions:

    • COVID-19 recession showed unprecedented job losses compared to post-WWII recessions.

    • Data presented in terms of percentage differences in number of jobs since employment peak across different recessions.

Types of Unemployment

Four Kinds of Unemployment

1. Structural Unemployment

  • Results from mismatched skills with employers' needs, often requiring relocation.

2. Cyclical Unemployment

  • Occurs due to insufficient demand in the economy, leading to reduced hiring.

3. Frictional Unemployment

  • Refers to individuals temporarily between jobs, often voluntarily seeking better employment.

4. Seasonal Unemployment

  • Associated with seasonal jobs which naturally ebb and flow throughout the year.

Most Important Types of Unemployment to Address

  • Structural unemployment is a long-term issue related to skills and location.

  • Cyclical unemployment is indicative of broader economic conditions and low demand for goods/services.

Mitigating Unemployment

Strategies for Reducing Unemployment

  • Improvement of educational systems to enhance worker skills.

  • Investment in infrastructure projects to create jobs.

  • Decrease in taxes to stimulate economic growth and job creation.

  • Provision of subsidies or incentives for businesses to hire.

  • Discussion of the controversial approach: lower the minimum wage to encourage hiring.