Current Economic Analysis

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Current Economic Analysis

Economics Define unemployment? Provide an example of the three types of unemployment. Which type of unemployment is most problematic and why? What type of unemployment problem(s) does the U.S. currently have and why? What is a possible solution to the unemployment problem(s)?

Unemployment is the failure of a person to find jobs. (Schiller, 2006) This means that an unemployed person is one that is capable of working and is actively seeking for a job but is unable to find employment, which means that, this person is an active member of the labor force in search for job opportunities but unable to find one. This excludes full time students and homemakers who are not vigorously looking for jobs. Unemployment can be divided into three types known as frictional, structural, and cyclical (Schiller, 2006).

The first form of unemployment is frictional unemployment. It arises because workers seeking better opportunities do not find them immediately. While looking for work they are counted as unemployed. The same concept is also applied to new graduate students that are looking for jobs.

Example: A website project for a company is finished and the web designer is looking for more companies to design websites for.

Structural unemployment is created during major changes in an economic system. Structural means that people don’t have the skills needed to find a job in today’s market.

Example: The move from an industrial to a technological economy where so many people don’t have computer and communication skills needed to be employable in the new market.

Cyclical unemployment is usually directly tied to the state of the economy. It occurs when there is not enough demand for labor. In other ...

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