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Unemployment Case Usa

Essay by   •  October 9, 2011  •  Research Paper  •  1,266 Words (6 Pages)  •  1,866 Views

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The United States and most other countries have three main macroeconomic goals: economic growth, full employment, and price stability. A nation's economic well-being depends on carefully defining these goals and choosing the best economic policies for achieving those (Gitman & McDaniel, 2008, p.45).

Back to people's daily life, on the television, internet or radio, there is always something like, "Today the Labor Department reported that for the second straight month unemployment declined". Statements like this are macroeconomics news which refer to unemployment. However, what is unemployment? How many types of unemployment? What causes unemployment? This essay puts emphasis on talking about unemployment by answering all the questions above.

In economics, "a person who is able to work and willing to work yet is unable to find a paying job is considered unemployed". Unemployment refers to the condition and extent of joblessness within an economy. The terms unemployment and unemployed are sometimes used to refer to other inputs to production that are not being fully used (Wikipedia, n.d.). Basically, unemployment is the condition of not having a job, often referred to as being "out of work", or unemployed. Not having a job when a person needs one, makes it difficult if not impossible to meet financial obligations such as purchasing food to feed oneself and one's family, and paying one's bills; failure to make mortgage payments or to pay rent may lead to homelessness through foreclosure or eviction. Being unemployed, and the financial difficulties and loss of health insurance benefits that come with it, may cause malnutrition and illness, and are major sources of mental stress and loss of self-esteem which may lead to depression, which may have a further negative impact on health.

Unemployment is measured in terms of the unemployment rate, which is the number of unemployed workers divided by the total civilian labor force. According to the unemployment rate, government is able to determine how close the economic is to full employment. Besides, the rate excludes "discouraged workers," those not seeking jobs because they think no one will hire them.

Economists classify into four types of unemployment: frictional unemployment, structural unemployment, cyclical unemployment, and seasonal unemployment (Gitman & McDaniel, 2008, p.45).

Seasonal unemployment is "a product of regular, recurring changes in the hiring needs of certain industries on a monthly or seasonal basis" (Boyes, 2005, p.167). One example that comes to mind is holiday "mall jobs". As the annual Christmas season rolls around, businesses have a high demand for additional employees to assist in the mass quantities of new and frequent shoppers. Other examples include an increasing in temporary employees during the ski season, or during the harvest season. The key word here is, temporary. A majority of the seasonal employees are just temporary, meaning that when the demand diminishes, the employees are gone. They are now considered "unemployed" in their transition to find another job. For this very reason, unemployment rates are "seasonally adjusted".

Frictional unemployment is "a product of the short-term movement of workers between jobs and of first-time job seekers" (Boyes, 2005, p.166). This type of unemployment is uncontrollable in society, and has little impact on the economy. It is not related to the business cycle, and is always present in an economy. Suppose a person loses a job, perhaps because the work is finished. This could happen to a construction craftsman or craftswoman, for example, when the construction job is finished; or it could happen to an actor or actress when the show closes. It will ordinarily take some time before that person finds another job. But -- while construction craftsmen and entertainers can ordinarily expect to face this problem from time to time, it is something that can happen to anyone employed. People who are simply between jobs, in this

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