Labor Force

Labor Force / Workforce

● is the number of people who are employed plus

the unemployed who are looking for work.
● Discourage Workers
● Labor force participation rate
● Productivity
Employed / Employment

is an agreement between an employer and an employee

that the employee will provide certain services.
In return, the employee is paid a salary or hourly wage.
For example, employment can be:

1. An hourly part-time job that is paid a specific dollar

amount for each hour worked
2. Full-time employment in which individuals receive a
salary and benefits from an employer for performing the
tasks required by a particular position
3. A set schedule that requires employees to work a 40-hour
week with an hour for lunch and two 15-minute breaks,
one in the morning and one in the afternoon, as required
by state law
Unemployed / Unemployment
is when someone could work and wants to work but is unable to
find a suitable job.
Underemployed

A person not having enough paid work or not doing work

that makes full use of their skills and abilities.
People who are classified as underemployed include those
workers who are highly skilled but working in low paying or
low skill jobs, and part-time workers who would prefer to be
full-time.
Two types of Underemployment:

Visible Underemployment

Invisible Underemployment
Types of Unemployment

Classical
Cyclical
Structural
Frictional
Hidden
Long-term
Classical

occurs when real wages for job are set above the
market-clearing level. It causes the number of job seeks to
be higher than the number of vacancies
Cyclical
Cyclical unemployment is caused by declining demand: when there
is not enough demand in an economy for goods and services,
businesses cannot offer jobs. According to Keynesian economics,
cyclical unemployment is a natural result of the business cycle in
times of recession: if all consumers become fearful at once,
consumers will attempt to increase their savings at the same time,
which means there will be a decrease in spending, and businesses
will not be able to employ all
Structural

is a form of involuntary unemployment caused by a

mismatch between the skills that workers in the economy
can offer, and the skills demanded of workers by
employers.
Frictional

Frictional unemployment is caused by temporary transitions in

workers’ lives, such as when a worker moves to a new city and
has to find a new job. Frictional unemployment also includes
people just entering the labor force, such as freshly graduated
college students. It is the most common cause of
unemployment, and it is always in effect in an economy.
Hidden

refers to people who are jobless, but official

unemployment figures do not include them.
Long Term

The Bureau of Labor Statistics classifies individuals as

unemployed if they are without a job but have been actively
looking for one in the preceding four weeks. If individuals have
been searching for a job for 27 weeks or longer, then they are
considered long-term unemployed