Employment and Unemployment. Total Population age 16 and over Employed Employed Employees Self-employed Unemployed Unemployed New entrants Re-entrants

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  • Employment and Unemployment

  • Total Population age 16 and overEmployed Employees Self-employedUnemployed New entrants Re-entrants Lost last job Quit last job Laid offCivilian labor force

  • UNEMPLOYMENT Measurement of Unemployment, Jan 2005 TotalPopulationJan 2005 estimate295,412,000Civilian Laborforce147,979,00070,575,00076,858,0007,737,000140,241,000Unemployment Rate 5.2%Labor force participation rate65.8%

  • If the total population is 280 million, and the civilian labor force includes 129,558,000 with jobs & 6,739,000 unemployed but looking for jobs, then the unemployment rate would be ___%. Unemployment Rate = UnemployedLabor Force4.96,739,000 / 136,297,000 x 100 = 4.9%X 100

  • 1.8 million persons who were marginally attached to the labor force in January, about unchanged from a year earlier. These individuals wanted and were available to work and had looked for a job sometime in the prior 12 months. They were not counted as unemployedthey did not actively search for work in the 4 weeks preceding the survey.

    Discouraged workers, a subset of the marginally attached, were not currently looking for work specifically because they believed no jobs were available for them. The number of discouraged workers, at 515,000 in January, was slightly higher than a year earlier.

    The other 1.3 million marginally attached had not searched for work for reasons such as school or family responsibilities. Persons Not in the Labor Force

  • Three Types of UnemploymentFrictional temporary, transitional, short-term.(between jobs or search unemployment)

    Frictional unemployment signals that new jobs are available and reflects freedom of choice.These are qualified workers transferable skills. Examples:People who get fired or quit to look for a better one.2. Graduates from high school or college who are looking for a job.3. Seasonal or weather-dependent jobs such as: agricultural, construction, retail, or tourism. [lifeguards, resort workers, & migrant workers.]

  • Three Types of UnemploymentStructural technological or long term. basic changes in the structure of the labor force which make certain skills obsolete. Automation may result in job losses. Consumer taste may make a good obsolete. The auto reduced the need for carriage makers. Farm machinery reduced the need for farm laborers. Creative destruction means as jobs are created, other jobs are lost. Jobs of the future destroy jobs of today. Frictional and Structural make up the natural rate of unemployment.These jobs do not come back.Non-transferable skills choice is prolonged unemployment or retraining.

  • These jobs do come back.Three Types of Unemployment Cyclical fluctuations caused by deficient demand for goods and services Durable goods jobs are impacted the most. Purchase of these durables can be postponed because they can be repaired.Cyclical economic downturns in the business cycle.Cyclical unemployment is real unemployment.

  • Survey on UnemploymentBLS calls 60,000 households every month. They ask three questions: Are you working? If the answer is no, 2. Did you work at all this month-even 1 day? You are a member of the LF if yes on 1 or 2.

    3. Did you look for work during the last month? [agency, resume, interview] A yes counts you aspart of the LF. A no means you are not counted. You are a discouraged worker. The labor force consists of the employed and unemployed.

  • Full EmploymentFull employment is less than 100% because the economy is dynamicfrictional and structural unemployment are often inevitable.The Full employment rate of unemployment or the Natural Rate of Unemployment (NRU) is present when the economy is producing its potential output. NRU is present when the number of job seekers equals the number of job vacancies. When labor markets are in balance, there is lag time. Workers seeking jobs and those retraining are the cause of the lag. The Natural Rate of Unemployment exists when the cyclical unemployment is zero.

  • Economists in the 1980s thought the NRU was 6%. Today, the figure is 4 to 5%. Why? Fewer workers available as baby boomers age. Workers find jobs more quicklythe internet is a source of information. Changes in the welfare system put more people in the labor force. Doubling of US prison population removes relatively high unemployment individuals from the labor force. The NRU is not static; the economy will want to move to its potential output and cyclical unemployment can interfere. When labor markets are tight, firms quickly retrain structurally unemployed and workers who previously were not in the labor force come back, the economy can operate below the NRU.

  • Natural & Actual Unemployment Rates

  • Europes Natural Unemployment Rate is 8%-11%1. Labor unions are stronger2. There are more restrictions on firing workers which makes employers reluctant to hire them in the 1st place.3. Much more generous unemployment insurance4. Sweden-(free college); unemployment for 2 years with 95% pay; and maternity leave is for two years.

  • Another Look at the Natural Rate

  • Hottest Jobs5 Jobs for Independence1. Computer engineer2. System analyst3. Psychologist4. Clinical social worker5. Marketing, advertising, public relations managerEcon, Econ5 Jobs for the Money1.Physician/surgeon ($156,000/$200,000)2. Airline pilot ($95,794)3. Computer engineer ($70,000)4.Management consultant ($60,000)5. Lawyer($58,000)6. Teaching - oh!!

  • In 1960, 60% of jobs could be held by unskilled or semi-skilled workers. Today, it is only 15%.JOB FACTOID!

  • Hottest JobsThese jobs will have the most net gains through 2012 (in 1000s)Teachers K-12724,000Registered Nurses623,000Post secondary teachers603,000Customer service reps458,000Computer support420,000General Operations Manager376,000Sales reps356,000Truck drivers337,000Software engineers307,000Accountants and auditors205,000Bureau of Labor Statistics

  • Computer Engineering $52,169Chemical Engineering $52,038Electrical/Electronics Engineer $50,566Computer Science $50,5435. Mechanical Engineering $49,4006. Mgmt Info Sys/Bus. Data Processing$42,5437. Economics/Finance $42,1508. Civil Engineering $41,0679. Accounting $42,36010. Management Info Sys $40,00011. Teaching $40,60012. Nursing $37,80313. Marketing/Marketing Mgmt. $36,67414. Business Admin/Mgmt $36,51515. Communications $28,00016. Psychology $27,000Top Paying College Majors for 2004

  • Fastest Growing Fields These jobs will add the largest percentage of positions through 2012Network Systems and Communication Analysts57%Physician Assistants48.9%Software Engineers45.5%Physical Therapist Assistants44.6%Fitness Trainers44.5%Database Administrators44.2%Dental Hygienists43.1%Hazardous material removal workers43.1%Computer Systems analysts39.4%Environmental Engineers38.2%

  • The FEDS Pay Well Many US Government jobs pay a higher average salary than what the private sector pays.

    (in thousands of dollars)FED GovtpaysPrivate Sectorpays1Astronomer$104$862Financial Managers 94 843 Economist 84 634Chemist 80 575Electrical Engineer 76 746Public Affairs 70 517Librarian 67 548Land Surveyor 63 599Nurse 61 5210Secretary 37 31

    8 - *Economic GrowthThe Business CycleUnemploymentInflationCPIRedistributive Effects of InflationAnticipated InflationEffects of Inflation on OutputKey Terms

    199715

    10

    5

    0FranceU.K.GermanyU.S.Japan19922002GLOBAL PERSPECTIVEUnemployment Rates 5 Industrial Nations1992 - 2002Source: Economic Report of the President, 2003

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