Unemployed Economy

Unemployed Economy

History

There are different types of unemployment.

-frictional unemployment is when an individual moves from one job to another job. During that move, that individual experiences temporary unemployment between jobs.

-structural unemployment is when an individual is disinclined or incapable to alter natural features or skills. Structural unemployment is caused by a mismatch between the work and the site of job seekers. "Location" is considered to be geographical, or in terms of skills.

-Cyclical unemployment is when there is not sufficient collective demand for the employment. There are four different types of cyclical unemployment.

-Technological unemployment is when an individual is replaced by a machine or other advanced technology.

-Classical unemployment is when real wages for jobs are set above the market clearance level, normally the government level that is set (known as the minimum wage) or the level that is set by the unions.

-Marxian unemployment is when unemployment is needed to inspire employees to work hard and to keep wages down.

-Seasonal unemployment is when an occupation is not in demand at certain seasons.

United States Unemployment History

During September 1929, prices began to fall. By October panic began to cause selling on Wall Street and prices began to fall catastrophically. The day that Wall Street crashed is also known as Black Thursday. By 1932, about one third of the total work force was unemployed. With the loss of so many jobs, the total demand for goods began to fall. With the drop of demand of goods came the loss of even more jobs.

President Hoover was the current president at the time of the fall of Wall Street. President Hoover tried to help the economy by increasing spending on roads, bridges, and public buildings. Hoover did not want the American people to become dependent on federal aid, so he refused to introduce federal unemployment relief.

The presidential election caused the exit of President Hoover and the entrance of President Roosevelt. Under President Roosevelt, unemployment fell to between 14% - 17% during 1937. During that same year the economy fell to a point known as the recession.

The Federal Emergency Relief Act was passed to assist the jobless, by giving states with funding to grant employment for fixing infrastructure and humanizing parks and schools.

A brief history of unemployment

The United States seems to continue Patterson of the nations past. Fast forwarding to 2007, shows a great deal of similarity between the rise in unemployment rates between 1937, 1981, and 2007.

Solution #1 Unemployed vs. Employed

According to classical economists there is always full employment in the economy. Neither ever raises unemployment nor there possibility of inflation. This is the reason, they believed in the operation of market forces and free enterprise system, except law and order like situation of the economy.

But during 1930's Great Depression, classicists 'utopia' of full employment was shattered when millions of people were jobless and looking for jobs. Then it is being realized that government should interfere in economic life. Because there are many interrelated factors which start effecting ...