02/11/14 Unemployment

• Unemployment- Percentage of people who do not have jobs, but are in the labor force.
• Labor force= employed + unemployed
• Not in the labor face
• Kids
• Military Personnel
• Mentally insane
• People in prison
• Stay at home moms/dads
• Full time students
• Retired people
• Discouraged workers (tried looking for jobs, but cannot find job)
• Considered employed if 16 years or older and you have a job.
• Considered unemployed if 16 years or older and you do not have a job.  But you have to be actively looking for a job for at least 2 weeks.
• Unemployment Rate

• Types of Inflation
1. Seasonal (lifeguards, holiday mall jobs)
2. Frictional (between jobs) New opportunities come up, change in educational levels, lifestyles, and choices.
3. Structural (associates with lack of skills, change in technology, or a decline in industry.)
4. Cyclical (associates with down turns in the business cycle, it is bad for societies as well as individuals) a recession is in place.
• Full Employment (FE)
• NRU (National rate of Unemployment) 4-5%
• Okun's Law- For every 1% of unemployment above the NRU causes a 2% decline in real GDP.