Transcript Unemployment

Unemployment
Objective:
• What are the different types of
unemployment?
• How are unemployment rates
determined?
• What is full employment?
*Be sure to leave a couple blank lines under each question and
answer the questions at the end of the lesson.
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CA Standard(s) Covered
12.5 Students analyze the aggregate economic
behavior of the U.S. economy.
2. Define, calculate, and explain the significance of an
unemployment rate, the number of new jobs created
monthly, an inflation or deflation rate, and a rate of
economic growth.
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Types of Unemployment
Frictional Unemployment
•
Occurs when people change jobs, get laid off from their current jobs,
take some time to find the right job after they finish their schooling, or
take time off from working for a variety of other reasons.
Seasonal Unemployment
•
Occurs when industries slow or shut down for a season.
Structural Unemployment
•
Occurs when workers' skills do not match the jobs that are available.
Technological advances are one cause of structural unemployment.
Cyclical Unemployment
•
Unemployment that rises during economic downturns and falls when
the economy improves.
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Determining the Unemployment Rate
• A nation’s unemployment rate is an important
indicator of the health of the economy.
• The Bureau of Labor Statistics polls a sample of
the population to determine how many people are
employed and unemployed.
• The unemployment rate is the percentage of the
nation’s labor force that is unemployed.
• The unemployment rate is only a national average.
It does not reflect regional economic trends.
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Full Employment
Full employment is the level of employment reached
when there is no cyclical unemployment.
• Economists generally agree that in an economy that is
working properly, an unemployment rate of around 4 to 6
percent is normal.
• Sometimes people are underemployed, that is working a
job for which they are over-qualified, or working part-time
when they desire full-time work.
• Discouraged workers are people who want a job, but have
given up looking for one.
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Section 1 Assessment
1. Unemployment that occurs when workers’ skills do not match the jobs
that are available is known as
(a) frictional unemployment.
(b) structural unemployment.
(c) seasonal unemployment.
(d) cyclical unemployment.
2. The unemployment rate
(a) is the percentage of the labor force that is unemployed.
(b) is the number of people who are unemployed.
(c) includes only discouraged workers.
(d) is the percentage of the labor force that is underemployed.
Want to check unemployment rates??? Click Here!
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Section 1 Assessment
1. Unemployment that occurs when workers’ skills do not match the jobs that
are available is known as
(a) frictional unemployment.
(b) structural unemployment.
(c) seasonal unemployment.
(d) cyclical unemployment.
2. The unemployment rate
(a) is the percentage of the labor force that is unemployed.
(b) is the number of people who are unemployed.
(c) includes only discouraged workers.
(d) is the percentage of the labor force that is underemployed.
Want to check unemployment rates??? Click Here!
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HW
•Read pages 331-336
and complete
questions 1-4 p.336
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Inflation
Objective:
• What are the effects of rising prices?
• How do economists use price
indexes?
• What are the causes and effects of
inflation?
*Be sure to leave a couple blank lines under
each question and answer the questions at
the end of the lesson.
Chapter 13
Section
Main Menu
CA Standard(s) Covered
12.5 Students analyze the aggregate economic
behavior of the U.S. economy.
2. Define, calculate, and explain the significance of an
unemployment rate, the number of new jobs created
monthly, an inflation or deflation rate, and a rate of
economic growth.
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The Effects of Rising Prices
• Inflation is a general increase in prices.
In 1950 in South San Francisco:
– House (2 bed, 1 bath): $14,500
– Average income: $3,216 per year
– Ford car: $1339
– Milk: $.82 per gallon
– Gas: $.20 per gallon
– Postage stamp: $.03
• Purchasing power, the ability to purchase goods and
services, is decreased by rising prices.
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Price Indexes
A price index is a measurement that shows how the
average price of a standard group of goods changes
over time.
• The consumer price index (CPI) is computed each month by the
Bureau of Labor Statistics.
• The CPI is determined by measuring the price of a standard group
of goods meant to represent the typical“market basket” of an
urban consumer.
• Changes in the CPI from month to month help economists
measure the economy’s inflation rate.
• The inflation rate is the percentage change in price level over time.
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Causes of Inflation
The Quantity
Theory
• The quantity
theory of
inflation states
that too much
money in the
economy leads
to inflation.
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The Demand-Pull
Theory
The Cost-Push
Theory
• The demand-pull • According to the
theory states that
cost-push
inflation occurs
theory, inflation
when demand for
occurs when
goods and
producers raise
services exceeds
prices in order
existing supplies.
to meet
increased costs.
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Effects of Inflation
• High inflation is a major economic problem, especially
when inflation rates change greatly from year to year.
Purchasing Power
– In an inflationary economy, a dollar loses value. It will not buy the same
amount of goods that it did in years past.
Income
– If wage increases match the inflation rate, a worker's real income stays the
same. If income is fixed income, or income that does not increase even
when prices go up, the economic effects of inflation can be harmful.
Interest Rates
– When a bank's interest rate matches the inflation rate, savers break even.
When a bank's interest rate is lower than the inflation rate, savers lose
money.
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Section 2 Assessment
1. Inflation is
(a) the process by which rising wages cause higher prices.
(b) the price increase of a typical group of goods.
(c) a general increase in prices.
(d) the ability to purchase goods and services.
2. Too much money in the economy is the cause of inflation according to
(a) the quantity theory.
(b) the demand-pull theory.
(c) the quantum theory.
(d) the cost-push theory.
Let’s check out an inflation calculator! Click
Here!
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Section 2 Assessment
1. Inflation is
(a) the process by which rising wages cause higher prices.
(b) the price increase of a typical group of goods.
(c) a general increase in prices.
(d) the ability to purchase goods and services.
2. Too much money in the economy is the cause of inflation according to
(a) the quantity theory.
(b) the demand-pull theory.
(c) the quantum theory.
(d) the cost-push theory.
Let’s check out an inflation calculator! Click
Here!
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HW
• Read pages 338-343 and complete
questions 1-4 p. 343.
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Poverty
Objective:
• Who is poor, according to government
standards?
• What causes poverty?
• How is income distributed in the United States?
• What government programs are intended to
combat poverty?
*Be sure to leave a couple blank lines under each question and
answer the questions at the end of the lesson.
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CA Standard(s) Covered
12.3
Students analyze the influence of the federal
government on the American economy.
3. Describe the aims of government fiscal policies (taxation,
borrowing, spending) and their influence on production,
employment, and price levels.
12.4
Students analyze the elements of the U.S. labor
market in a global setting.
1. Understand the operations of the labor market, including the
circumstances surrounding the establishment of principal
American labor unions, procedures that unions use to gain
benefits for their members, the effects of unionization, the
minimum wage, and unemployment insurance.
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Who Is Poor?
The Census Bureau collects data about how many
families and households live in poverty.
The Poverty Threshold
The Poverty Rate
• The poverty threshold is
an income level below
which income is
insufficient to support a
family or household.
• The poverty rate is the
percentage of people in a
particular group who live
in households below the
official poverty line.
–In 2010 = $14,570
(single parent w/ 1 child)
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–African Americans /
Latinos = 2X more than
Whites
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Causes of Poverty
Lack of Education (#1 cause of poverty) (Link to Education & Income Chart)
•
The median income of high-school dropouts in 2010 was $18,608. (The 20092010 poverty threshold for 1 individual is: $10,830)
Location
•
On average, people who live in the inner city earn less than people living
outside the inner city.
Racial and Gender Discrimination
•
Some inequality exists in wages between whites and minorities, and men and
women.
Economic Shifts
•
Workers without college-level skills have suffered from the ongoing decline of
manufacturing, and the rise of service and high technology jobs.
Shifts in Family Structure
•
Increased divorce rates result in more single-parent families and more
children living in poverty.
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Income Distribution in the United States
Income Gap
• A 2010 study showed that the richest 3.1
million Americans earn 21.2 percent of all
U.S. income, which is as much as the
poorest 110 million Americans.
• Or, in another words, the richest 1
percent of Americans earned the same as
the poorest 36 percent of Americans.
•Link to Graphs
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Government Policies Combating Poverty
The government spends billions of dollars on programs
designed to reduce poverty.
• Employment Assistance
– The minimum wage and federal and state job-training
programs aim to provide people with more job options.
• Welfare Reform
– Temporary Assistance for Needy Families (TANF) is a
program which gives block grants to the states, allowing
them to implement their own assistance programs.
– Workfare programs require work in exchange for
temporary assistance.
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Section 3 Assessment
1. An income level below which income is insufficient to support a family
or household is known as the
(a) income gap.
(b) poverty rate.
(c) poverty threshold.
(d) income inequality.
2. What’s the #1 cause of poverty?
(a) Location
(b) Economic Shifts
(c) Lack of Education
(d) Shifts in Family Structure
Let’s check out the up-to-date poverty line. Click Here!
Chapter 13
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Section 3 Assessment
1. An income level below which income is insufficient to support a family or
household is known as the
(a) income gap.
(b) poverty rate.
(c) poverty threshold.
(d) income inequality.
2. What’s the #1 cause of poverty?
(a) Location
(b) Economic Shifts
(c) Lack of Education
(d) Shifts in Family Structure
Let’s check out the up-to-date poverty line. Click Here!
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HW
• Read pages 345-350 and complete
questions 1-5 p.350
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Education and Income
• Potential earnings increase with increased educational
attainment.
89664
62618
47422
Ave. Yearly Earnings in 2010
28788
22552
18608
Doctoral Degree
Master's Degree
Bachelor's Degree
Associate Degree
HS Graduate
Less than HS Diploma
Source: U.S. Census Bureau
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•Over the past 20
years, earnings for
college graduates
have increased,
while earnings for
workers without
college degrees
have decreased.