Unemployment
Unemployment as defined by the International Labor Organization occurs when people are without jobs and they have actively looked for work within the past four weeks. The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force.
There are a few types of unemployment that are used to more precisely model the effects of unemployment within the economic system. The main types of unemployment include structural unemployment which focuses on structural problems in the economy and inefficiencies inherent in labor markets including a mismatch between the supply and demand of laborers with necessary skill sets. Structural arguments emphasize causes and solutions related to disruptive technologies and globalization. Discussions of frictional unemployment focus on voluntary decisions to work based on each individual’s valuation of their own work and how that compares to current wage rates plus the time and effort required to find a job. Causes and solutions for frictional unemployment often address barriers to entry and wage rates. Behavioral economists highlight individual biases in decision making and often involve problems and solutions concerning sticky wages and efficiency wages.
History
There are limited historical records on unemployment because it has not always been acknowledged or measured systematically. Industrialization involves economies of scale that often prevent individuals from having the capital to create their own jobs to be self-employed. An individual who cannot either join an enterprise or create a job is unemployed. As individual farmers, ranchers, spinners, doctors and merchants are organized into large enterprises, those who cannot join or compete become unemployed.
Recognition of unemployment occurred slowly as economies across the world industrialized and bureaucratized
About 25 million people in the world's 30 richest countries will have lost their jobs between the end of 2007 and the end of 2010 as the economic downturn pushes most countries into recession. In April 2010, the U.S. unemployment rate was 9.9%, but the government’s broader U-6 unemployment rate was 17.1%. There are six unemployed people, on average, for each available job. Men account for at least 7 of 10 workers who lost jobs, according to Bureau of Labor Statistics data. The youth unemployment rate was 18.5% in July 2009, the highest July rate since 1948. 34.5% of young African American men were unemployed in October 2009. Officially, Detroit’s unemployment rate is 27%, but the Detroit News suggests that nearly half of this city’s working-age population may be unemployed. 3.8 million Americans lost their jobs in 2009.
The official unemployment rate in the 16 EU countries that use the euro rose to 10% in December 2009. Latvia had the highest unemployment rate in EU at 22.3% for November 2009. Europe's young workers have been especially hard hit. In November 2009, the unemployment rate in the EU27 for those aged 15–24 was 18.3%. For those under 25, the unemployment rate in Spain was 43.8%.
A flood of inexpensive consumer goods from China has recently encountered criticism from Europe, the United States and some African countries. In South Africa, some 300,000 textile workers have lost their jobs due to the influx of Chinese goods. The increasing U.S. trade deficit with China has cost 2.4 million American jobs between 2001 and 2008, according to a study by the Economic Policy Institute (EPI). A total of 3.2 million – one in six U.S. factory jobs – have disappeared between 2000 and 2007.
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