In compiling Unemployment statistics for the United States and other developed countries an unemployed person is defined as anyone who is capable of working and is actively seeking work but is unable to find a job. 1Before a person can be unemployed in this sense he must be an active member of the labor force in search of a job. Students and Homemakers perform work, but they are not considered employed unless they are paid; however, they are not considered unemployed unless they are actively seeking gainful jobs. In societies in which a majority of the citizens are able to earn a living by working for others, being unable to locate and obtain a job is a very serious problem.
Unemployment is widely used as a measure of workers’ welfare because of the human costs and feelings of rejection and personal failure. The proportion of workers unemployed also shows how well a nations human resources are used and serves as an index of economic activity. The civilian labor force comprises the total of all civilians classified as employed or unemployed. The total labor force also includes members of the Armed Forces stationed either in the US Or abroad. The unemployment rate represents the number unemployed as a percent of the civilian labor force. 2Unemployment can be divided percent of the civilian labor into three types known as frictional, structural, and cyclical.
The first form of unemployment is frictional unemployment. Frictional unemployment arises because workers seeking jobs do not find them immediately. While looking for work they are counted as unemployed. 3 This could happen if suppose a person loses a job, perhaps because the work is finished.
For example a construction craftsman when the 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 workers 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 sense, are said to be frictionally unemployed. The amount of frictional unemployment depends on the frequency with which workers change jobs and the time it takes to find new ones. 4 This is a particularly important category, since this category of unemployment can never be eliminated or reduced to zero.
Even in the best functioning market economy, there will be some people who are between jobs. However, I think this type of unemployment could be reduced somewhat by more efficient placement services. The second form of unemployment is structural unemployment. Structural unemployment arises from an imbalance between the kinds of workers wanted by employers and the kinds of workers looking for jobs.
The imbalances may be caused by inadequacy of skills, location, or personal characteristics. 5 Technological developments necessitate new skills in many industries, leaving those workers who have outdated skills without a job. A plant in a declining industry may close down or move to another area, throwing out of work those employees who are unable to unwilling to move. Workers with inadequate education or training and young workers with little or no experience may be unable to get jobs because employers believe that these employees would not produce enough to be worth paying the legal minimum wage or the rate agreed upon with the union. On the other hand, even highly trained workers can be unemployed.
This happened in the United States in the early 1970’s, when the large numbers of new graduates with doctoral degrees in physics and mathematics exceeded the number of jobs available in those fields. 6 If employers practice illegal job discrimination against any group, a high unemployment rate for those workers could result even when jobs are plentiful. Structural unemployment shows up most prominently in some cities, in some occupations or industries, for those with below average education, and for some other groups in the labor force. The third form of unemployment is cyclical unemployment. Cyclical unemployment results from a general lack of demand for labor. When the business cycle turns downward, demand for goods and services drops.
Consequently workers are laid off. 7 In the 19th century, the United States experienced depressions roughly every twenty years. .