Structural and cyclical unemployment.
Structural Unemployment. Unemployment resulting from changes in the basic composition of the economy. These changes simultaneously open new positions for trained workers. It arises when changes in technology or international competition change the skills needed to perform jobs or change the location of jobs. Structural unemployment usually lasts longer than frictional unemployment because workers must retrain and possibly relocate to find a job. Sometimes, the amount of structural unemployment is modest. At other time, it is large, and such times, structural unemployment can become a serious long-term problem. Cyclical Unemployment. A factor of overall unemployment that relates to the cyclical trends in growth and production that occur within the business cycle. When business cycles are at their peak, cyclical unemployment will be low because total economic output is being maximized. When economic output falls, as measured by the gross domestic product (GDP), the business cycle is low and cyclical unemployment will rise. Is the fluctuating unemployment over the business cycle-unemployment that increases during a recession and decreases during an expansion. If jobs are lost permanently, even during a recession, is that structural or cyclical unemployment?
That is Structural unemployment, beacause jobs are lost permanenently, even during a recession or not, instead more jobs are created. Acoording to Fedaral Reserve, the predominance of permanent job looses over temporary layoffs and the relocation of jobs from one industry to another. The data suggest that most jobs added during the recovery have been new positions in different firms and industries, not rehires what makes it structural unemployment, not cyclical. This shift to new jobs largely explains why the payroll numbers have been so slow to rise: Creating jobs takes longer than recalling workers to their old positions and is riskier in the current uncertain enviroment. The job losses associated with cyclical shocks are temporary: at the end of the recession, industries rebound and laid-off workers are recalled to their old firms or readily find comparable employment with another firm. Job losses that stem from structural changes, however, are permanent: as industries decline, jobs are eliminated, compelling workers to switch industries, sectors, locations, or skills in order to find a new job. Why would it take longer to create a new job rather than rehire for an old job? The creation of new jobs, takes time and invesment. Not many industries are willing to go throgh the process it requires to creat a new job. It is always easier to rehire for an old job; if rehiring, it means that a person meets the standards for the job, and the job meets the standars for the company as well. Then there will be no need for them to create a new job or hire a new person. A rehire will be easier and will take less time, than finding someone else that have the captability and skills that job requires. A rehire would be the if the person being rehire left in good terms, and for some reason the firm had to let them go.