*Example: people now working
Underemployment- Examples: * When a school has so much talent but we don't use it
* Working less than 12 hours a week
Labor Force- above 16 years of age and those who are able and willing to work
(employ + unemployed)
-equation above makes up the labor force
Not in labor force- Military (majority time in other countries), students, retired people, disabled. home makers (stay at home mother/ father), mental home institutes, jail/prison, those who are not looking for a job
Unemployment rate- 4-5%= full employment or Natural Rate of Unemployment (NRU)
* having a percentage under 4% is great
How to calculate the unemployment rate:
# of unemployed
--------------------------------------------- x 100
# of employed + # of unemployed
Types of unemployment
Frictional: those who are searching for a job, they are temporally unemployed or in between jobs, transferable skills but not working.
*Examples- college and high school graduates, people that were laid off
Structural: change in structure of the labor force made some skills obsolete, these people have no transferable skills and their jobs may never come back. Must learn new skills to get a new job.
*Example- NASA employee getting laid off
Seasonal: due to the time of year and the nature of the job
*Examples-school bus drivers, life guards, Santa Clause and Easter bunny impersonator, construction workers
Cyclical: unemployment that results in economic down turn such as recession as demand falls for goods and services, demand for labor falls and workers are laid off.
-full employment means there is no cyclical unemployment
Equation: Frictional + Structural= Natural Rate of Unemployment (NRU)
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