Structural Unemployment And Cyclical Unemployment In The United States

2703 words - 11 pages

The high and persistent levels of unemployment in the United States have become one of the most debated topics among economists, policy makers and the unemployed for more than a decade; especially its impact and best approach to resolving the increasing unemployment rates. It is important to note that as much of a global phenomenon unemployment it is, unemployment occurs in numerous forms, economists have broken down unemployment into three main types: Frictional, structural and cyclical. The in-cooperation of these forms is significant to this paper for better understanding of current trends and identifying characteristics of structural unemployment.

 Frictional Unemployment arises from the ever-present movement of people into and out of jobs, it depicts the period where the quantity of labor demanded just equals the quantity of labor supplied at going market wage1. Examples include first time job searchers like college graduates or previously employed workers who are returning to work. A pattern of the matching process occurs in frictional unemployment similar to structural unemployment but the distinctive features are frictional unemployment is more of a voluntary nature and it’s a lot shorter compared to structural unemployment2.

 Structural unemployment can be defined as a form of unemployment where at a given wage rate, the quantity of labor supplied exceeds the quantity of labor demanded because there is a fundamental mismatch between the number of

1 Ehrenberg,R.G.and Robert S.S. (2012).Modern Labor Economics:Theory and Public Policy,11thEdition.Boston,MA:Pearson Education,Inc. p 502
2 Ibid p 501-502

people that want to work and the number of jobs available that consequently lengthen unemployment3. It’s usually as a result of mismatch between the skills or location of jobless worker and the skills or location required by available jobs, the composition of the unemployed and certain characteristics of the labor market institutionssuch as wage replacement rate and duration of unemployment benefits4.

 Cyclical unemployment or Keynesian unemployment occurs when there is deficiency or decrease in the demand for goods and services in an economy5. It occurs when aggregate demand reduces and there aren’t enough jobs for people that wish to work. Cyclical unemployment is affected and caused mostly by market forces6; reduction in the demand for goods and services in an employer’s mind usually means fewer workers are needed so they adjust by temporarily laying off workers and cutting hours of employees retained to fill reduced product demand. Professor Feld man in his unemployment lecture said “Employers usually don’t start hiring immediately when demand begins to rise until they are confident that economic growth will continue the recall experienced workers or hire new ones” this is because of the fear of market instability or market fluctuations in a weak economy.

3 Ehrenberg,R.G.and Robert S.S. (2012).Modern...

Find Another Essay On Structural Unemployment and Cyclical Unemployment in the United States

Unemployment in the US Essay

4009 words - 16 pages Money conflicts in relationships are reflective of society=s growing insecurity about its financial future. America is turning into a fatalistic culture. This negativity is based on economic conditions that contradict the once prevalent belief of never-ending prosperity. The United States= stalled economy, mind boggling national debt, and the prospect of the collapse of the Social Security system have left many Americans terrified about their

The Economy and Unemployment Essay

698 words - 3 pages The Economy and UnemploymentA well-known fact is that the economy is at one of the worst points in history. If people sit down to think of how the drop of the economy has affected them, they will come up with at least one common answer; unemployment. Everyone knows someone who has been laid off, most likely it was a family member, a friend or even themselves. Due to the fall of the economy, some companies have had to close some of their stores

Unemployment and Migration in the Philippines

2027 words - 8 pages United States and Spain (European Union, 2009). The export of laborers was seen by the Marcos administration in the early 1970s as a solution to economic problems when it coincided with the surge in the demand for contract workers in the Middle East (O’Neil, 2004). Most migrants in this period were men as the available work were under construction of infrastructures. It changed in the 1980s to demand for women as domestic and service workers (European

Unemployment and the Great Recession

1568 words - 6 pages the population would have learned to live with. The minority communities like Africans have tasted the worst impacts of recession. This is so because unemployment rates are highest within these communities. By the year 2010, the unemployment rate of the African population in the United States stood t 16.1%. These groups have been hit most because the level of education among the majority of them is low, compared to that of the dominant

Causes of Unemployment in Bosnia and Herzegovina

1626 words - 7 pages “Dnevni avaz” (n.d.) states that in next several years, Bosnia and Herzegovina is going to be faced with the lack of capable doctors, engineers and other highly educated professions. 3.2.2 Poverty Another significant problem of unemployment in Bosnia and Herzegovina is poverty. The unemployment rate is the major indicator for determining poverty rate in one country. According to research done by Research Center Sarajevo, poverty rate is calculated to

The Keynesian and Neoliberal View of Unemployment

2588 words - 10 pages sources of unemployment. “The key to the ‘Keynesian solution’ was the use of counter-cyclical fiscal measures to produce high and stable levels of both income and employment” (Course-reader 25). Keynes shifted the focus of economic analysis towards the need for economic stability as the basis for generating the required levels of aggregate demand in the capitalist economy and away from the concern over the production and supply of the economy

Unemployment and Economics.

948 words - 4 pages probability theory and setting up a stochastic process as a model of behavior. That's a barrel of fun, but unfortunately way too complicated and confusing for me to go into. There are several different kinds of unemployment to consider.As an industry changes and develops, skills needed for work change and the nature of the industry causes a change in the demand for workers. This is called structural or frictional employment. Structural unemployment

Unemployment in Britain

1875 words - 8 pages a decline in several of Britain's strongest export industries, which soon resulted in mass structural unemployment. Some of these industries began to improve again in the late 1920’s, only to be knocked back by the wall street crash and subsequent depression of late 1929. By 1932, nearly half of all those employed in the production of iron and steel had lost their jobs (A. E. Booth and S. Glynn, p.632). This caused a further decline in the

Unemployment and Inflation.

4509 words - 18 pages following example illustrated by a graph showing the NRU of US economy:"Most economists estimate the natural unemployment rate to be 5 or 6 percent. If we take a 5 percent unemployment rate as our working definition of full employment, anything above 5 percent would be cyclical unemployment.Frictional 2.5% (Natural)Structural 2.5% (Natural)5.0% (Full unemployment)Cyclical 1.7% (Not natural)Unemployment Rate 6.7%The NRU in this example is 5% and the

Unemployment in Kyrgyzstan

834 words - 3 pages Akhmat DzhukaevRahat SabyrbekovECO-112ID-5557Unemployment in KyrgyzstanThe rate of unemployment is one of the most used indicators of the wellbeing of the labor force of country and the economy of a country as whole. Although the measuring of the rate of unemployment is very easy in theory as it classifies adult people as either employed, unemployed, or out of the labour force, it is much more complicated in practice. That is why the official

Unemployment and Happiness

1645 words - 7 pages unhappiness. “In Switzerland, to give a concrete example, depending on previous and on circumstances (for example, whether one has children or is disabled), unemployment benefits make up either 70 or 80 percent of the past income. With an income level of 70 or 80 percent compared to previous paid employment, the probability that an unemployed person states that he is “completely satisfied” is 20.6% points lower due to “pure” unemployment effect. If the

Similar Essays

Unemployment In The United States Essay

3074 words - 12 pages problems between the United States and Mexico exemplifies the difficulties the US labor force is experiencing with international competition, and this is the question of the masquiladoras. Masquiladora industries is based in Mexico, along the US border; referred to as the twin industries and are assembly plants that, according to the International Trade Commission (ITC), are focused in the manufacturing of electric and electronic goods, textiles

Structural Unemployment In Hong Kong Essay

1809 words - 7 pages . Introduction Unemployment refers to people who are available for work but are not employed and have tried to seek for jobs during the previous four weeks. Unemployment can also be subdivided into classical unemployment, frictional unemployment, structural unemployment, cyclical unemployment, seasonal unemployment and long-term unemployment. Unemployment lowers the living standard and creates financial burden to the unemployed people. It also

Unemployment In The United States Has Fluctuated Due To Economic Conditions Through The Decades.

1357 words - 5 pages Unemployment has been a cycle throughout history, and in the United States, there have been many cycles with both positive and negative affects on the economy as well as the society. Many events or conditions can be associated with unemployment, there being a relationship between the two. When the history of the United States in reviewed, there have been extreme conditions that stand out over the years.Unemployment is used to describe the

Repercussions Of The Great Recession And The Impact Of Unemployment Towards The Medical Conditions And Family Life In The United States

1307 words - 5 pages by 8 percent (McInerney, Mellor, & Nicholas, 2013). The unemployment has a large impact on the mental and physical health conditions in the United States, as public health care services have still not developed entirely. However it must be acknowledged that some research has proven those people who lost relatively large wealth to be mentally and physically affected more dramatically as those citizens, which made a relative small loss of wealth