The term unemployment is used to describe anyone or any group of people who are willing to work but do not have at least some form of occupation.
There are several types of unemployment. One type of unemployment is frictional unemployment. Frictional unemployment describes a person’s transition between jobs. With this type of unemployment there is still a vast number of jobs available, however, people either have not found a job that they are qualified for or have not found one that they are interested in. Taking the time to find a good job is beneficial to the person who is searching and to the economy in general. This however does not usually happen immediately and is the reason for frictional unemployment. Frictional unemployment is not much of a concern for people because it is usually short term and can be compensated for by unemployment insurance programs.
Another type of unemployment is structural unemployment. Structural unemployment is when there is a mismatch between the types of jobs people are looking for and the types of jobs that are being offered in that specific area or at that specific time. A cause of structural unemployment involves shifts in which employment rises in some sectors and falls in other sectors. This means that the U.S. may have a huge demand for computer engineers in Texas, but that does not do a person any good if they live in New Hampshire and have mechanic skills. People with specialized skills who live in declining sectors tend to not get paid as much as they should due to low demand. Having specialized workers in a declining sector hurts the economy as a whole because people are making less money and therefore are spending less at local businesses. This creates a snowball effect in which people are not making or spending any money. The most common way to alleviate this problem is for people to move to the cities where their skill is most in demand. Doing this brings people to a city and helps the economy grow and also helps the people who are leaving to go to another city so that they can benefit from their skilled position.
A third type of unemployment is cyclical unemployment. Cyclical unemployment is a result of macroeconomic fluctuations. Unlike structural unemployment which affects only small sectors or areas, cyclical unemployment affects the country as a whole. This is a major concern and can cause extreme economic problems like the ones experienced during the Great Depression and the past few months. The buying power of the dollar goes down because people stop spending money the way they used to.
Natural Unemployment is the lowest rate of unemployment that the economy can sustain over a long period of time. It is generally believed that the government could lower the rate of unemployment but that this would result in increased inflation. The natural level of unemployment at which inflation remains stable is known as the “Non Accelerating Inflation Rate of Unemployment.”
Anyone who is eligible to work and able but is not employed and has not attempted to find a job for at least a month is known as a discouraged worker. Discouraged workers are either people who could not find any job that suited them or people that prefer to stay at home rather than work. This may be to spend time with children or spend time on some kind of hobby. Due to the fact that discouraged workers are no longer looking for employment, they are not considered active in the labor force. Discouraged workers as a result of this are no longer counted in determining the national unemployment rate.
Full employment is a situation in which all available labor recourses are being used in the most economically efficient way. This demonstrates the highest number of skilled and unskilled workers that could possibly be employed at one time in the economy. Anyone who is not working is either incapable of maintaining an occupation or not willing. Full employment can be attainable in any economy. Full employment could theoretically bring about a period of high inflation. This period of increased inflation would be due to the fact that more people are working and therefore have more disposable income.
Many factors can lead to people becoming unemployed. Rising costs that force businesses to cut back in labor is one factor. In the automobile industry today high oil prices are reducing company profits and forcing them to cut down on their employees. Another cause of unemployment is when there is a mismatch in the types of jobs in the area and the types of skills of the workers in that same area. Another reason for unemployment is rapid growing technology. In today’s world there is an increasing amount of technology being produced that can reduce the number of employees needed and be even more efficient than before. Another reason for unemployment is the inability to get proper training for good jobs because of either insufficient funding or because people are uniformed about how to get it.
There are several ways that unemployment can be dealt with on a personal level. An individual who is unemployed can learn to budget money and not buy things that are completely unnecessary. Also, it is wise to plan for unemployment by setting aside some cash so that there is not such an immediate need to find a job. Another way is to search for jobs using every available resource such as newspapers, television, radio, classifieds, friends, or just by walking down the street and searching on foot. It may be necessary and also much more beneficial for people who are unemployed to not just look for local jobs but rather to search in other parts of the country or even abroad. In certain cases where a person was unjustly fired or when the circumstances call for it a person can collect unemployment which can help temporarily alleviate money problems.
On an aggregate level, unemployment can be minimized through increased funding in educational institutions and career fairs that help people find jobs. The United States helps people who are unemployed through UI or Unemployment Insurance program. Franklin D. Roosevelt signed provisions for the creation of UI on August 14, 1935. This however was not the first of its kind. The first unemployment insurance plans were created by trade unions in Switzerland in 1789 and were supported by dues. The first government funded unemployment system was adopted by Great Britain in 1911. In the United States in 1932 Wisconsin enacted a state unemployment system as a result of the Great Depression. During that time more than 25 percent of the workforce was unemployed. From 1948 to 2004, the monthly U.S. unemployment rate has ranges from about 2% to 10%. During this time unemployment has averaged about 5.6%. Over the past several years unemployment has risen about as high as it has ever been and should be one of the main concerns for Barack Obama. Recently though the unemployment rate has dropped slightly.
Unemployment is a term that describes anyone who does not have and occupation and is allowed and able to work. There are several types of unemployment such as frictional, structural, and cyclical. There are many causes for unemployment such as rising costs, lack of funding for education, and low demand in certain areas. Unemployment is not just a concern for individuals but for the country as a whole. Unemployment can have a great impact of the United States economy whether it is positive or negative. Nonetheless unemployment is something that should be carefully monitored and dealt with to help people maintain a healthy life and so that the economy too can remain stable.
http://sayanythingblog.com/mobile/entry
www.eoearth.org/article/types_of_unemployment
www.dol.ks.gov/ui/html/enlist_dbr.html
