Economic Trends in the Classroom
New! Study questions to accompany Economic Trends—Cleveland Fed articles that fill you in on the current state of the economy.
Study Questions: The Employment Report and Displaced Workers
The Employment Report and Displaced Workers . Read more
Study Questions: The Employment Report and Displaced Workers
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The U.S. economy remains down 7.75 million jobs almost three years after the peak of employment in December 2007. Describe what conditions make this cycle particularly striking when compared to previous recession-recovery periods.
- The depth and length of the recession coupled with the shallowness of the recovery make this cycle striking when compared to previous recession-recovery periods. Another striking feature is the severity of the cycle, which is reflected in the number of unemployed workers, 6.1 million, who are currently unemployed and have been out of work more than 27 weeks.
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The Displaced Worker Survey conducted by the Bureau of Labor Statistics every two years asks long-tenured workers who are older than 20 years of age, about the nature and cause of job displacement over the last three years. How have the reasons cited for displacement changed over the different survey years?
- In 2002 and 2008 the reason cited for displacement was the closing or moving of a plant or company. While in 2010, the most frequent response from workers was that they were displaced because their employer may be still operating, but not have enough work to keep them employed.
- What were the re-employment rates for displaced workers in 2002, 2008, and 2010? What industries had the highest and lowest re-employment rates in 2010?
- In 2002 the re-employment rate was 63.4 percent; in 2008 it was 67.1 percent; and in 2010 it was 48.8 percent. Re-employment rates were lower across all industries in 2010, but people displaced from finance, insurance, and real estate industries had high re-employment rates, while workers in the durable-goods industries had very low re-employment rates at 33.4 percent.
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What is the difference between structural and cyclical unemployment?
- Structural unemployment is described as a skill mismatch in which firms may have vacancies and there are unemployed workers, but hiring is slow because the skills of the unemployed workers do not match the requirements of the open positions. Cyclical unemployment is described as the result of businesses having weak demand for labor because of a decrease in consumption and spending.