Unemployment
In industrialized countries in which most people can earn a living only
by working for others, being unable to find a job is a serious problem. Because
of its human costs in deprivation and a feeling of rejection and personal
failure, the extent of unemployment is widely used as a measure of workers'
welfare. The proportion of workers unemployed also shows how well a nation's
human resources are used and serves as an index of economic activity. Economists
have described the types of unemployment as frictional, structural, and cyclical.
The first form of unemployment is Frictional unemployment. Frictional
unemployment arises because workers seeking jobs do not find them immediately.
While looking for work they are counted as unemployed. The amount of frictional
unemployment depends on the frequency with which workers change jobs and the
time it takes to find new ones. Job changes occur often in the United States. A
January 1983 survey showed that more than 25 percent of all workers had been
with their current employers one year or less. About a quarter of those
unemployed at any particular time are employed one month later. This means that
a considerable degree of unemployment in the United States is frictional and
lasts only a short time. This type of unemployment could be reduced somewhat by
more efficient placement services. When workers are free to quit their jobs,
some frictional unemployment will always be present.
The second form of Unemployment is structural unemployment. Structural
unemployment arises from an imbalance between the kinds of workers wanted by
employers and the kinds of workers ...