The United States has had the good fortune to avoid a major business downturn with high and prolonged unemployment.for almost two decades; by contrast, Europe and japan spent most of the 1990s with stagnant economic conditions and massive unemployment. How can millions of people be unemployed when there is so much work to be done? What flaw in a modern mixed economy forces so many who want work lC1 remain idle? To what extent is high unemployment primarily due to flawed unemployment insurance and other government programs that reduce the incentive to work? The balance of this chapter provides a tour of the meaning of unemployment and some answers to these important questions.