Unemployment, Poverty and How GDP Is Affected
Columbus, Ohio, U.S.A
EC 141 Principles of Macroeconomics
Fricke, Klaus K.
September 28, 2011
Unemployment, Poverty, and how GDP Is Affected
This paper explores both, online (Internet) articles and published books and articles that report on and define unemployment, the different types of unemployment and its effect upon the U.S. economy. In addition it will also examine the correlation between unemployment, poverty and how this affects GDP (Gross Domestic Product). It will also mention war and the negative effect of war on the U.S. economy. And make clear that joblessness is the main culprit pushing more Americans into poverty. “We’re risking a new underclass,” said Timothy Smeeding, director of the Institute for Research on Poverty at the University of Wisconsin, Madison.
In order to measure unemployment The Bureau of Labor Statistics (BLS) divides the total U.S. population into three groups.
1. People under 16 years of age and people who are institutionalized. 2. Adults who are potential workers but are not employed and are not seeking work i.e. stay-at home parents, full-time students, or retirees.
3. The labor force, which constitutes slightly more than 50 percent of the total population in 2009.” The labor force consists of people who are able and willing to work. Both those who are employed and those who are unemployed but actively seeking work are counted as being in the labor force.
The unemployment rate is the percentage of the labor force which is unemployed. There are five different types of unemployment:
Seasonal- this is when people such as construction workers and landscapers are unemployed because of changing seasons and change in demand for such services.
Frictional- This is a result of people constantly changing jobs in attempt to find...