Question
Frictional unemployment (Uf) and structural unemployment (Us) cannot be avoided in an economy. Uf is caused by workers switching jobs, it is impossible to ask
Frictional unemployment (Uf) and structural unemployment (Us) cannot be avoided in an economy. Uf is caused by workers switching jobs, it is impossible to ask workers stopping switching jobs, so it cannot be avoided. Us is caused by jobs becoming obsolete which is a by-product of economic growth. When technology advances, we use machines to replace labor. Or we may find cheaper labor overseas, thus relocating our manufacture process to oversea market. These actions taken by the producers cannot be avoided. That is why natural unemployment rate is the addition of Uf and Us. It is about 4-5% in US. When economy reaches natural unemployment, it is considered full employment. During recession, there is cyclical unemployment.
In your opinion, which type of unemployment rate is much harder to recover? Thoughts?
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