Unemployment means there aren't enough jobs to go around. It means people are out of work, without earned income. It means inactive workers who cannot feed their families. Any unemployment is bad. Rising unemployment is worse.
The unemployment rate is measured as the percentage of people in the civilian labour force who currently do not have jobs. To be counted in the civilian labour force, you must be 16 years of age or older, not in the military and currently working or actively looking for work. Thus, all people who do not have jobs currently are counted as unemployed as long as they are actively seeking employment.
This means that many people who are not working are not officially unemployed. For example, retirees, housewives, househusbands and full-time college students who have not yet entered the job market are not counted as labour force participants; neither are they officially designated as unemployed. These persons may join (or rejoin) the labour force at any time by actively engaging in a job search. A person who enters the job market will be counted as unemployed until he or she has been hired as a full-time worker.
Unemployment is classified into three distinct categories: frictional, cyclical and structural.
Frictional Unemployment: This is when workers are free to enter and leave the labour force, as they are free to move from one job to another in a different location or with a different employer, and as they may take as long as they choose in the job search. In this sense, frictional unemployment represents workers' freedom to seek the best job available to satisfy their own preferences.
Structural Unemployment: Structural unemployment occurs when people are made unemployed because of capital-labour substitution (which reduces the demand for labour) or when there is a long run decline in demand in their particular industry. Structural unemployment exists where there is a mismatch between their skills and the...