Unemployment

JM
by Jennifer Marmo1 view·Updated Apr 29, 2020
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  1. I'm Jenny Marmo, and this is my presentation on unemployment.
  2. The workforce People not in the workforce are not included
  3. in unemployment.
  4. The workforce includes people ages 16 and over, not full
  5. time students not discouraged workers.
  6. So people still actively looking for a job and able
  7. workers, people who do not have an injury and are
  8. physically able to work.
  9. The natural rate of unemployment is 4% to fash percent,
  10. and it is not zero because of two types of
  11. unemployment we will look at in the next slide.
  12. There are three types of unemployment frictional unemployment.
  13. People are temporarily between jobs.
  14. Quit one job to find another or have just graduated
  15. from high school or college.
  16. And since these people are no longer full time students,
  17. they can be in the workforce and they can be
  18. unemployed. Cyclical unemployment, people who are not needed in the
  19. workforce. There is a lack of demand in the labour
  20. market due to the business cycle, which we will look
  21. at in a few slides.
  22. Structural unemployment.
  23. People who lack skills do not have enough education for
  24. current job openings.
  25. In the labor market, there is always frictional and structural
  26. unemployment because people are always looking for new jobs and
  27. the structure of the economy is always changing.
  28. Uh, advancements in technology, for example, can change the structure
  29. of an economy.
  30. Cyclical unemployment will occur or not based on where the
  31. current economy is in the business cycle.
  32. This is the business cycle, and on the Y axis
  33. we have a real GDP.
  34. And on the X axis we have time.
  35. So first there's another upward curve, but then it goes
  36. down and it goes back up in the expansionary curve.
  37. The real output in the economy or the Judy P
  38. in the economy is increasing and the unemployment rate is
  39. declining. As the economic expansion continues, inflation may begin to
  40. accelerate the early part of an expansionary phases, also called
  41. recovery phase.
  42. Now that expansion will lead to a peak where the
  43. real GDP is at the highest point of the business
  44. cycle. Now, from that peak, it will begin to curve
  45. downwards into a recession or a contractionary curve.
  46. That is, when viewed, GDP in the economy is decreasing
  47. and the unemployment rate is rising.
  48. As a contraction continues, inflationary pressures subside.
  49. The later stage of the contraction, or face is also
  50. called a recession, as I mentioned, and then that curve
  51. will lead to a trough, which is the lowest point
  52. of real GDP.
  53. If it is particularly deep is called the Depression, and
  54. that is an economic situation where the level of output
  55. falls to extremely low levels and unemployment climbs to very
  56. high levels.
  57. There is no precise decline in output at which a
  58. serious recession becomes a depression.
  59. Um, most business cycles do not end in depression, but
  60. it has happened before.
  61. Um, the line that has that goes through the entire
  62. business cycle is, um, could the full employment line.
  63. So that is when it is that, UM, 4% or
  64. 5% the unemployment rate formula.
  65. The U equals unemployed people divided by the labor force
  66. times 100 the unemployed or people looking for work on
  67. the labor force are people working plus people looking for
  68. work. So, for example, uh, if there are 100 unemployed
  69. people and there were 200 people who were working, then
  70. you take 100 divided by, um 300 which is 100
  71. plus 200 which is the only re force in that
  72. equals 0.33 of repeating as a decimal, and then you
  73. times that by 100 which is 33.3% and that is
  74. the unemployment rate formula, and that is the end of
  75. my presentation.