Unemployment

A detailed Summary of Unemployment

Is unemployment inherently bad for an economy? The answer to this question seems obvious--yes--but in economics no question can be answered so simply. There is an old saying in economics that has very few exceptions. It says that for every economic loser there is a winner, and for every economic winner there is a loser. The loser of unemployment is obvious. The people that don't have jobs create a lot of social and economic harm. Exploring these harms and trying to find the good effects of unemployment was the purpose of my research. I did all of my research in Murphy Library, which is an academic library at the library. I had to go through several sources before I found some that would be good for my project. I evaluated my sources based on the credentials of the authors, and relevance to my paper. I was unable to find any source that says that all unemployment is good. I did, however, find some sources that say some unemployment isn't bad, and some is needed.

To begin understanding the effects of unemployment, one must first understand what unemployment is. In their book, Paul Wonnacott, who received a Ph.D. in economics from Princeton, and Ronald Wonacott, who received his Ph.D. in economics from Harvard Universi

The final type of unemployment is called cyclical unemployment. Cyclical unemployment is caused by the business cycle: the recessions and booms that a normal economy experiences. Cyclical unemployment occurs when the economy can't support as many jobs. This is the type of unemployment that is associated with the social problems and harms that are caused by unemployment. These harms will be explained later in this paper.

Wonnocott and Wonocott go on to say that unemployment can be broken down into three categories. The three types are structural, frictional, and cyclical. Structural unemployment happens when jobs become obsolete because of changing technology. Frictional unemployment is when people are unemployed while finding a job that best matches their talents. These types of unemployment are good for society as a whole. High structural unemployment implies that technology is increasing, which is good for increasing societies overall standard of living. High frictional unemployment means that people are working hard to find a job that best fits their talents; this is good for society because it shows that talents are not going to waste.

An article written by Randall Wray, published in The Journal of Economic Issues, a scholarly publication, says that it is commonly excepted that we will have full employment if three percent of Americans are unemployed. He also says that "neither accepted economic theory nor practical experience indicates that high or full employment is possible with stable prices"(539). Inflation is expected if unemployment gets too low. Inflation will occur because if everyone is employed, workers will have much mo

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Category: Politics