Gm545 Business Economics-Project Paper 2

There are three different kinds of unemployment that affect our economy: frictional, cyclical and structural. Frictional unemployment occurs when there is a time laps between being employed and looking for work. This term can also be referred to as search employment because it is the time spent searching for a place of employment. One example of this would be a student taking time off of work to finish college and get a 4 year degree. Usually, it takes a lot of time and dedication to finish the last years of school, so some students tend to go to school full time and work part time or not at all. This type of unemployment is also classified as voluntary unemployment because this period of unemployment is at the discretion of the person to some small degree. Secondly, there is cyclical unemployment which changes depending on the business need; for example, workers are laid off when business is bad - then

in structure of demand for products of different industries, elimination of outdated industries and professions. For instance, unemployment is caused by foreign competition or Cathy lost her job as a cashier due to the creation and use of self-bill out counters. Structural unemployment exists where there were unemployed workers may be short of technical capacity of talent and the claim of the new job opportunities. They are employed but at the same time are unemployed at other time. When a season’s occupation is not a demand occurs. Ski resort unemployment is may be higher in the summer because there snow.

Firstly Cyclical unemployment or demand deficient unemployment is caused by a lack of spending throughout the economy and generally affects all sectors of the economy because spending is falling. To overcome this, the government needs to introduce policies which seek to boost spending throughout the economy. An example would be a loosening of monetary policy and cutting interest rates which make borrowing for individuals and businesses cheaper. They borrow money which is then spent in the economy which

GDP is a measure of economic activity in an economy. The measure can be calculated in three ways, measuring the output by calculating the value of all the goods and services produced within a country, as expenditure, measuring the value of all goods and services purchased with in the economy, which will include the value of exports, but required reduction of imports, lastly the income measure, where GDP is measured through the level of income generated, mainly through profits and wages (BBC News, 2011). Therefore, the GDP seen measurement of economic activity and since the 1960s there has been a proliferation of statistics utilizing the GDP, usually on a per capita basis, as a proxy to indicate social welfare

Unemployment has been on the rise in the United States in recent years. One of the large contributing factors of this is the change in the structure of the country’s economy. Many jobs, particularly manufacturing and industrial type jobs are being outsourced to other countries. An increase in unemployment due to a change in the economy is structural unemployment. This paper will discuss how structure unemployment is causing harm to the United States economy.

One of the scariest word for many individuals among the United States can be unemployment. Many families across America have had to deal with the hard blow that can come with losing a job, or not being able to find a job. Unemployment will always be around to snatch the job from any unwilling victim. While unemployment may seem like a broad term, there are actually four categories, or types, of unemployment. These four types are structural, cyclical, frictional, and seasonal.

Unemployment is one of the main financial complications in America today. Individuals who are measured as unemployed if the individuals is looking for work or laid off for more than a week. There are numerous diverse details why an individual could be jobless. Three of those causes are cyclical, structural and seasonal unemployment. The administration tries to find answers in order to decrease unemployment by making up guidelines.

Whether it is high or low, the unemployment rate has proven its ability to have a strong negative impact on individual firms and organizations. As of December 2014, America’s

Chapter 7 and 8 from “A Guide to Everyday Economic Statistics” explains the value of prices, money, and interest rates alongside the value of stock prices and international trade. As a result, we will be able to grasp the concept of how the Consumer Price Index (CPI), how to use an estimate the inflation from the CPI, Producer Price Index (PPI), prime rate and how to measure the Dow Jones Industrial Average (DJIA) and international value of the dollar in the stock market.

The largest cause of unemployment can be attributed to recession. The term recession refers to the backward movement of the economy for a long period. People spend only when they have to. (Nagle 2009). With people spending less there would be less money in circulation therefore, enterprises would suffer financially and people would suffer too. This is so because recession reduces the fiscal bases of enterprises, forcing these enterprises to reduce their workforce through layoffs. These enterprises lay off their workers in order to cut the costs they incur in terms of wage and salary payments.

Another reason for unemployment is automation of some work routines that replace person workforce. Factories are replacing workers with robots, there are systems that perform repetitive tasks and, as a consequence, it eliminates some employees. For instance, nowadays we have been using our smartphones to do many things that, in the past, we couldn’t do such as bank payment system and assembly of cars. However, countries significantly reduce barriers between them such as cultural, professional and technological. Thus, globalization makes countries familiar with factors that are helpful in the long run. It not only is replacing workers, but also creating new careers. For instance, nowadays international business requires qualified workers in the field of trade management, which was not required in the

Structural unemployment may occur in the short term with the removal of trade barriers. This will have impact on large numbers of workers, as well as their families and local economies. In growth industries workers often will have difficulties to find employment.

The expenditure method cannot be used where markets are unorganised. The production method cannot also be used for unorganised sectors such as small-scale industries, trade and transport, and so on. Different methods are used to measure the income genera ted by various sectors of the economy. For calculating national income, the Indian economy is divided into 14 broad sectors, which are then grouped into three main categories : A, B and C.

Economic analysis often begins by examining a country’s gross national income, (GNI) i.e., the monetary value of the total flow of goods and services within its economy. Then related measures such as growth rates, income distribution, inflation, unemployment rates, debt, and the balance of payments are considered.

According to one article, “Structural unemployment occurs when certain industries decline because of long term changes in market conditions” ("Unemployment types", 2017). More specifically, as Amadeo states, structural unemployment occurs when “Factories move to cheaper locations” (2017) and more efficient options (such as newer technologies, more skilled employees, etc.) are undertaken. Moving on to the minor types, surplus, being the first, is “caused by minimum wage laws, unions and wage/price controls. When wages are set at a high level, unemployment often results” (Amadeo, 2017). The second minor type is demand deficient unemployment. When there is less demand for a particular product, “firms sell less and so reduce production. If they are producing less, this leads to lower demand for workers” (Pettinger, “Demand Deficient Unemployment”, 2017). Therefore, as the name implies, this is caused by an unmet demand when compared to the people in that specific line of work. The third minor, but also major, type is full employment, which is known to be “devoid of cyclical or deficient-demand unemployment” ("Full Employment", 2017), according to one source, and is not simply, as the name suggests, where everyone has a job. In addition, “full employment means that unemployment has fallen to the lowest possible level without provoking inflation” (Palmer, 2016). Regional unemployment is the fourth minor type, being impacted by structural unemployment and,