Question

For each of the following, indicate if the person would be classified officially as employed, unemployed (STRUCTURAL/FRICTIONAL/CYCLICAL), or not in the labor force: GIVE AN EXPLANATION IN EACH CASE IN FEW WORDS ONLY.

(i) A worker quits his job at the Post office to find more interesting work.

(ii) Collin has lost his job with a telemarketing company, which has moved its operation to India and he is now looking for a new job.

(iii) Frank recently lost his job as the computer manufacturing company he works for recently downsized after poor sales and poor performance of the economy during the last year

Answer 1

i) A worker quits his job at the Post office to find more interesting work is an example of a worker experiencing frictional unemployment.

Frictional unemployment : When people temporarily unemployed between jobs. They may have quit one job to find another, or they could be trying to find the best opportunity after graduation.

So the worker is Frictional unemployed.

ii) Collin has lost his job with a telemarketing company, which has moved its operation to India and he is now looking for a new job.

Collin is structurally unemployed.

Structurally unemployment : It involves mismatches between job seekers and job openings. unemployed people who lack skills or do not have sufficient education are placed here/ dumb people.

iii) Frank is experiencing cyclical unemployment since there are fewer jobs in his field than are demanded as a result of the recession.

Cyclical unemployment occurs when a downturn in economic activity decreases employment.