How is Unemployment Measured?
Employed: This category includes those who worked as paid employees, worked in their own business, or worked as unpaid workers in a family member’s business. Both full-time and part-time workers are counted. This category also includes those who were not working but who had jobs from which they were temporarily absent because of, for example, vacation, illness, or bad weather.
Unemployed: This category includes those who were not employed, were available for work, and had tried to find employment during the previous 4 weeks. It also includes those waiting to be recalled to a job from which they had been laid off.
Not in the labor force: This category includes those who fit neither of the first two categories, such as a full-time student, homemaker, or retiree.
Unemployment rate= (Number of unemployment)/ (Labor force) * 100
1. Fictional unemployment: Unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills.
2. Structural unemployment: Unemployment that results because the number of jobs available in some labor markets is insufficient to provide a job for everyone who wants one.
2. Unemployment is minimum-wage laws. by raising the wage of unskilled and inexperienced workers above the equilibrium level, minimum wage laws raise the quantity of labor supplied and reduce the demanded. The resulting surplus of labor represents unemployment.
3. Market power with unions. When unions push the wages in unionized industries above the equilibrium level, they create a surpuls of labor.
4. Efficiency of wages. According to this theory, firms find it profitable to pay wages above the equilibrium level. High wages can improve worker health, lower worker turnover, raise worker quality and increase worker effort.
How to count employment rates?
Labor Force: as the sum of the employed and the unemployed.Unemployment rate= (Number of unemployment)/ (Labor force) * 100
Why are there always some people unemployed?
There are always some workers without jobs, even when the overall economy is doing well. In other words the unemployment rate never falls to zero. Some reason can be...1. Fictional unemployment: Unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills.
2. Structural unemployment: Unemployment that results because the number of jobs available in some labor markets is insufficient to provide a job for everyone who wants one.
The Main 4 Reasons:
1. Unemployment is the time it takes workers to search for jobs that best suit their tastes and skills. This fictional unemployment is increased as a result of unemployment insurance, a government policy designed to protect workers' incomes.2. Unemployment is minimum-wage laws. by raising the wage of unskilled and inexperienced workers above the equilibrium level, minimum wage laws raise the quantity of labor supplied and reduce the demanded. The resulting surplus of labor represents unemployment.
3. Market power with unions. When unions push the wages in unionized industries above the equilibrium level, they create a surpuls of labor.
4. Efficiency of wages. According to this theory, firms find it profitable to pay wages above the equilibrium level. High wages can improve worker health, lower worker turnover, raise worker quality and increase worker effort.
