Unemployment: Types and Causes
Unemployment has been a problem in the United States since the beginning of our economic structure. The current unemployment rate fell by 0. 4 percentage point to 8. 6 percent in November. “The number of unemployed persons at 13. 3 million was down by 594,000 in November. The labor force, which is the sum of the unemployed and employed was down by a little more than half that amount. ” (Trading Economics, 2011). There are many different types of unemployment. Frictional unemployment reflects the fact that it takes times for people to find and settle into new jobs.
For example if 12 individuals each take one month before they start a new job, the unemployment statistics will record this as a single unemployed worker. Technological change will often reduce frictional unemployment. Another type of unemployment is structural; this type of unemployment reflects a mismatch between the skills and other attributes of the labor force and those demanded by employers. Natural rate of unemployment is the summation of frictional and structural Unemployment Types and Causes 3 unemployment.
Unemployment: Types and Causes Essay Example
It is the lowest rate of unemployment that a stable economy can expect to achieve seeing as some frictional and structural unemployment is inevitable. Economist does not agree on the natural rate, with estimates ranging from 1% to 5%. The estimated rate varies from country to country and from time to time. Demand deficient unemployment is another example of unemployment. In Keynesian economics, any level of unemployment beyond the natural rate is most likely due to insufficient demand in the overall economy.
The cause and effects of finding work in the United States has been a hot topic because unemployment has been affecting many Americans. During the eighties and the nineties the Unites States experienced a lower level in unemployment. However, in the past few years the unemployment rate has risen over ten percent. This is the highest percentage increase in the country in over twenty years. “Unemployment in America has not just affected one class of Americans, its affecting the rich, middle class, and the lower class. ” (Rakoczy, 2009).