Unemployment is the labor situation in which a person does not work but wishes to. unemployment occurs when there is an excess of labor demand compared to the labor supply in the market

Unemployment may also come about if wages offered in the market as less than what workers desire and believe they should receive.

People are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work. In the United States, monthly unemployment totals have ranged between about 7 and 11 million in recent years. 


Unemployment In order to know how many people are unemployed, their age, sex, ethnicity, skills, cause of unemployment, and any other information related with this situation, the government issues statistics announcing the total amount of people who´ve become unemployed compared the previous month.

The Bureau of Labor Statistics (BLS) of the United States Department of Labor is the institution in charge of this. The survey uses a sample of about 60,000 households (approximately 110,000 individuals), both from rural and urban areas, and different types of industrial and farming areas. They are interviewed for information on the labor forces, such as job seeking, and non-labor force status of the members of these households over, and including, 15 years old although the statistics show all members that are 16 and older. Every month, one-fourth of the households in the sample are changed, so that no household is interviewed more than 4 consecutive months. Afterwards, these households leave the sample for 8 consecutive months and are interviewed then for another 4 months, continuing the cycle. Interviewers are given intensive training, including classroom lectures, discussion, practice, observation, home-study materials, and on-the-job training.

At least once a year, they attend day-long training and review sessions. Also, at least once a year, they are accompanied by a supervisor during a full day of interviewing to determine how well they carry out their assignments. 


There are several types of unemployment depending on the causes that originates them. First of all, we may find voluntary and involuntary unemployment. The voluntary unemployment consists of people willingly leaving his or her previous job, looking for a new one or voluntarily not working due to low wages, while involuntary unemployment derives from being fired and needing to look for a job somewhere else. We may also find frictional unemployment, which is due to the natural frictions of the economy, represented by qualified individuals with transferrable skills who change jobs, students entering the work force, and therefore are seeking a job, along with women who re-enter the work force after having their children, keeping in mind that maternity leave does not count as unemployment.

This type of unemployment occurs because it takes time from one worker to move from one job to another. This type is usually thought to last only short periods of time and not be specifically problematic from an economic standpoint. Cyclical unemployment derives from a permanent imbalance between job supply and job demand, reason why this type is higher during recessions and depressions and lower during periods of high economic growth. During recessions, the demand for good and/or services in an economy falls, and the company´s response, in some cases, is to reduce production and consequently firing workers, instead of cutting wages and work hours; this causes there to be more job demand than job supply, causing unemployment. As the economy recovers, cyclical unemployment tends to disappear.

Structural unemployment may be caused by two reasons; workers who possess skills that are not in high demand in the marketplace and, on the contrary, lack skills that actually are demanded, and some labor markets have more workers than there are jobs available, and for some reason wages don´t decrease to bring the markets into equilibrium. This type of unemployment tends to be long-term, which is why it is thought to be a significant problem. Seasonal unemployment occurs because the demand for some workers varies along the course of the year (for example, specific summer jobs, such as lifeguard, or specific winter jobs, such as ski instructor). This type may be thought as part of structural unemployment because workers have skills that are not needed at the moment. It is seen as less problematic that normal structural unemployment. 


One of the main goals of employment policies is to try to offer solutions to problems caused by unemployment. There are two big groups of employment policies; active and passive policies. The first one pretends to improve the entrance to work force of unemployed, while the second one refers to unemployment benefits, which tend to temporarily relieve the problems caused by wage loses.

Labor policies may also be considered as an employment policy, since they establish the rules under which the work market works.

Sometimes, this employment policy may be responsible for unemployment. For example, establishing a minimum wage for certain jobs at a higher level than regular minimum wages may cause an excess of job demand and, therefore, cause unemployment.


High Unemployment Due to Lack of Demand, Not Lack of Skills or Education

High Unemployment Due to Lack of Demand, Not Lack of Skills or Education



Types of Unemployment

Types of Unemployment