Conference of Unemployment

Examples of Conference of Unemployment in the following topics:

• Reasons for Unemployment

  • There are four types of unemployment.
  • The natural level of unemployment is the unemployment rate when an economy is operating at full capacity.
  • At this level of unemployment, the quantity of labor supplied equals the quantity of labor demanded, though this does not imply that unemployment is zero.
  • There is always at least some frictional unemployment in an economy, so the level of involuntary unemployment is properly the unemployment rate minus the rate of frictional unemployment.
  • Structural unemployment is a form of unemployment where, at a given wage, the quantity of labor supplied exceeds the quantity of labor demanded, because there is a fundamental mismatch between the number of people who want to work and the number of jobs that are available.

• Types of Unemployment: Frictional, Structural, Cyclical

  • Structural unemployment is one of the main types of unemployment within an economic system.
  • Frictional unemployment is another type of unemployment within an economy.
  • With cyclical unemployment the number of unemployed workers is greater that the number of job vacancies.
  • The natural rate of unemployment is a combination of structural and frictional unemployment.
  • This graph shows the average duration of unemployment in the United States from 1950-2010.

• Defining Full Employment

  • Full employment is defined as an acceptable level of unemployment somewhere above 0%; there is no cyclical or deficient-demand unemployment.
  • Mainstream economists define full employment as an acceptable level of unemployment somewhere above 0%.
  • Ideal unemployment excludes types of unemployment where labor-market inefficiency is reflected.
  • Ideal unemployment promotes the efficiency of the economy.
  • It corresponds to the level of unemployment when real GDP equals potential output.

• Typical Lengths of Unemployment

  • Short-term unemployment is any period of joblessness that lasts fewer than 27 weeks.
  • Unemployment can have lasting impacts of individual people as well as the economy as a whole.
  • When unemployment is high, the economy is not using all of the available resources, specifically labor.
  • It is not uncommon for social unrest and conflict that get worse during times of mass unemployment.
  • This graph shows the average length of unemployment in the United States from 1950-2010.

• Defining Unemployment

  • During periods of recession, an economy usually experiences high unemployment rates.
  • Hidden: the unemployment of potential workers that is not taken into account in official unemployment statistics because of how the data is collected.
  • The final measurement is called the rate of unemployment .
  • The effects of unemployment can be broken down into three types:
  • There are numerous solutions that can help reduce the amount of unemployment:

• Measuring the Unemployment Rate

  • The labor force is the actual number of people available for work; economists use the labor force participation rate to determine the unemployment rate.
  • Bureau of Labor Statistics measures employment and unemployment for individuals over the age of 16.
  • Bureau of Labor Statistics uses six measurements when calculating the unemployment rate.
  • They calculate different aspects of unemployment.
  • Classify the six measures of unemployment calculated by the Bureau of Labor Statistics (BLS)

• Employment Levels

  • One kind of frictional unemployment is called wait unemployment: it refers to the effects of the existence of some sectors where employed workers are paid more than the market-clearing equilibrium wage.
  • It is defined by the majority of mainstream economists as being an acceptable level of natural unemployment above 0%, the discrepancy from 0% being due to non-cyclical types of unemployment.
  • Unemployment above 0% is advocated as necessary to control inflation, which has brought about the concept of the Non-Accelerating Inflation Rate of Unemployment (NAIRU).
  • Seasonal unemployment may be seen as a kind of structural unemployment, since it is a type of unemployment that is linked to certain kinds of jobs (construction work or migratory farm work).
  • Frictional unemployment is always present in an economy, so the level of involuntary unemployment is properly the unemployment rate minus the rate of frictional unemployment.

• Shortcomings of the Measurement

  • In order to find the rate of unemployment, four methods are used:
  • The method is not the preferred method to use when calculating the rate of unemployment.
  • The measurement of unemployment is not an absolute calculation and is prone to errors.
  • By not including all underemployed or unemployed individuals in the measurement of the unemployment rate, the calculation does not provide an accurate assessment of how unemployment truly impacts society.
  • The unemployment rate is the percentage of unemployment calculated by dividing the number of unemployed individuals by the number of individuals currently employed in the labor force.

• The Short-Run Phillips Curve

  • As unemployment rates increase, inflation decreases; as unemployment rates decrease, inflation increases.
  • However, the stagflation of the 1970's shattered any illusions that the Phillips curve was a stable and predictable policy tool.
  • Nowadays, modern economists reject the idea of a stable Phillips curve, but they agree that there is a trade-off between inflation and unemployment in the short-run.
  • The idea of a stable trade-off between inflation and unemployment in the long run has been disproved by economic history.
  • Contrast it with the long-run Phillips curve (in red), which shows that over the long term, unemployment rate stays more or less steady regardless of inflation rate.

• "The General Act of the Conference"