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Not All Unemployment Is Created Equal, Star Wars Edition…

December 20th, 2010 · 8 Comments
Econ 101 · Macroeconomics

I’ve written about the different types of unemployment before, but let’s recap:

  • Frictional unemployment: the unemployment that happens simply because it takes a worker some time to find a new job after he gets laid off. In a perfect world, firms looking to hire would be circling the airspaces of the firms laying people off like hungry buzzards, but instead workers have to go and actively seek companies out after they finish licking their wounds from having gotten laid off. (Some of you may remember that this process was even more fun in pre-Internet days.)
  • Cyclical unemployment: the unemployment that happens simply because the economy is in the toilet at a particular point in time.
  • Structural unemployment: the unemployment that happens because there is a mismatch between the skills of unemployed workers and the needs of the economy. In other words, this:

    The stormtroopers have two options: They can either retrain so that they have skills that their economy needs or they can be entrepreneurial and figure out how to use their existing skills in a new way that their world is willing to pay for. I feel particularly bad for the specialized stormtroopers, since their skills are less likely to be transferable to new jobs. At least they have a bright future as special guests at ComicCon.

Tags: Econ 101 · Macroeconomics

8 responses so far ↓

  • 1 Rev. Pfloyd // Dec 20, 2010 at 7:16 pm

    We could possibly make this applicable to current times by replacing “stormtrooper” with “construction-industry worker” and “Death Star” with “housing sector”.

    No?

    ;-)

  • 2 Russ Nelson // Dec 20, 2010 at 7:42 pm

    I disagree that that would be a perfect world. It means that employers are suffering from a lack of employees, which means that the existing employees are being asked to work harder than they’d like, or that the company cannot produce all it wants, which means customers are going unhappy.

    No, a perfect world (as long as we’re waving the magic wand, we may as well wave it correctly) would be one in which every employer was able to hire the perfect employee for every position, and that employee had just gotten dismissed from his previous employment.

    Or, to pursue the thought experiment, nobody would ever have to be dismissed, because the business would always perfectly match its products against customer desire. Or an even more perfect world: people would do random shit, and other people would just want to buy it, and nobody would NEED a job and everybody would be doing just what they wanted.

    Sigh. that’s what happens when your magic wand has no limits on its powers. You get boring story.

  • 3 Thea Harvey // Dec 20, 2010 at 7:46 pm

    I read an article in Fortune Small Business about two Marines who had been in charge of cleaning up dead people in Iraq. When they came home they started a business doing this in the civilian sector. It was apparently quite successful and filled a need in society. THAT is what I call entrepreneurial ex-stormtroopers.

  • 4 Catherine // Dec 20, 2010 at 9:21 pm

    There’s also seasonal unemployment, which is usually industry-specific. This is when workers are temporary due to limited, one-time spikes in demand. For instance, ski resort workers typically know they’re only going to be employed during peak winter months. =)

  • 5 GYSC // Dec 22, 2010 at 9:56 am

    Indeed the Stromtroopers are in a cyclic unemployment at the destruction of the first Death Star, but the wookie forced slave labor was all set with the creation of the second Death Star.

    On a serious note, structural unemployment is the major US problem, just too many low end service jobs and not enough higher paying ones.

  • 6 Greg // Dec 24, 2010 at 2:48 am

    GYSC has it wrong. Too many ill-paid jobs is a structural employment problem, not a structural UNemployment problem.

    When there is structural unemployment, employers say “we can’t get enough workers no matter what we offer to pay”.

    The US’s major problem is cyclical unemployment.

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