13. Unemployment and its types.

The Unemployment Rate— the percentage of those in the labor force, over the age of 16, actively seeking work but unable to find jobs. Generally, the lower the unemployment rate, the greater the rate of economic activity.

High employment is a worthy goal for two main reasons:

1. the alternative situation, high unemployment, causes much human misery with families suffering financial distress, loss of personal self-respect and increase in crime

2. when unemployment is high, the economy has not only idle workers but also idle resources (closed factories and unused equipment), resulting in a loss of output (lower GDP).

Some economists are critical of the government's method of calculating unemployment because it fails to include the "discouraged worker" in its data. By the "discouraged worker" they mean someone who has been out of work for so long that he or she has simply given up looking for a job. Because they are no longer looking for work, discouraged workers are not counted as being unemployed and are not included in the unem­ployment rate. In addition, some people without a job may be really looking for work but have not register as unemployed.

Types of Unemployment.

Frictional unemployment. There are always some people who are out of work for completely unavoidable (неизбежная) reasons. For example, if takes time for workers to move from one job to another. Until they actually start working again, however, they will be counted in government data as "unemployed." Similarly, people entering the labor force for the first time are considered to be unemployed until they find their first job.

Seasonal employees are still another category of workers who spend a part of the year in voluntary unemployment. Waiters who earn their living at summer and winter resorts are a case in point. Their temporary layoffs during the fall and spring months add to the unemployment statistics.

Frictional unemployment also includes people whose physical and mental handicaps make them almost unemployable.

Structural unemployment. Structural unemployment results from technological and other changes in a local economy. It refers to unemployment arising because there is a mismatch of skills and job opportunities when the pattern of demand and production changes. There was a time, for example, when most building elevators were run by "elevator operators." Today, elevators are self-service. Elevator operators who lost their jobs when self-service cars were installed became pan of the structurally unemployed until they found other jobs.

Changing technology is not the only cause of structural unemployment. Long-term changes in consumer preferences or movement of jobs from one region or country to another can cause structural unemployment even among skilled workers. Failure to acquire needed skills also keeps many on the unemployment rolls. Young high school dropouts make up a large portion of today's structurally unemployed.

Cyclical unemployment. Changes in the business cycle also cause unemployment. During periods of contraction and recession, declining demand for goods and services results in rising unemployment.

What Is Full Employment?

When speaking of full employment, however, they do not mean the total elimination of unemployment. Specifically, they define an unemployment rate of between four and five percent as "full employment."

the natural rate of unemployment - demand for labor equals the supply of labor.