Real-life Case Study: Unemployment in a Changing Economy

Unemployment and Inflation

In the late 1990s, the United States found itself in the midst of an economic boom that would have been unimaginable only a decade earlier. Demand for workers continued to grow to such an extent that by 2000, the final year of the boom, there were more than 143 million jobs in the nation. Unemployment dipped below 4 percent.

Looking for Work During such a period of frenzied demand for workers, some people thought that anyone who wanted a job could get one. They were wrong. Even in periods of so-called full employment, there are always qualified people without jobs. Some companies move, while others fail. Some workers live in areas where there are few jobs available that match their skills.

Take Rick Taber, for example, a highly educated, skilled accountant who lives about 100 miles from Boston. When the company he worked for was purchased by another firm, he lost his job. There were jobs available in Boston, but Rick didn't want to move there. He spent almost a year searching for a job near his home that would match his skills and experience, but eventually had to take a job for which he was overqualified.

Job seekers can use the Internet to help them find the right job.

Older Workers Sometimes older workers have trouble finding jobs because of the emphasis on youth in the job marketplace. Many energetic men and women in their 50s and 60s, with years of experience in their fields, have difficulty finding work because some companies prefer to hire younger employees, who tend to work for smaller salaries.

Effects of Technology In addition, the technology that helped create millions of new jobs in high tech industries has also eliminated jobs in other areas. Many bank tellers, for example, have lost their jobs because computers and machines do many of their tasks more cheaply and efficiently. Telephone operators are being replaced by automated phone systems. As technology continues to perform routine tasks more efficiently, more and more Americans will find themselves switching jobs, and perhaps occupations.

Applying Economic Ideas

1. Why are some people jobless during periods of high employment?
2. How might technological changes in the workplace affect the unemployment rate?

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