Transcript Unemployment

COMING SOON…
• Extended Bellringer
• HANDOUT!
AGENDA
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Extended Bellringer (Do and Review)
Textbook reading: Unemployment
Notes: Unemployment
Exit ticket
EXTENDED BELLRINGER
• Complete the investments vocabulary handout
ECONOMIC INDICATORS
• Our country uses three specific indicators to gauge
the health of our economy:
• Unemployment rate
• Inflation rate
• Gross Domestic Product (GDP)
ECONOMIC INDICATORS
• Poverty rate is not predictable, but some
economists consider it in calculations
• Today we start with unemployment….
TEXTBOOK READING
• Read pages 487-495
• Complete ALL blue box questions on pages 497 and
498
• Turn in for classwork credit when finished
UNEMPLOYMENT
EL: ECONOMIC INDICATORS
ECONOMIC INDICATORS
• Economic indicators tell us how our economy is
doing
• The hope is that these indicators will help us
“predict” if our economy is heading towards
another depression
• Three forms:
• Inflation rate
• Unemployment
• GDP
MEASURING UNEMPLOYMENT
• BLS polls a large number of American families
• Labor force: civilians aged 16+ who have a job or
are actively seeking one
• Number of employed people + unemployed = total
labor force
• Divide number of unemployed people by the total
labor force x 100 = unemployment rate
UNEMPLOYMENT
• Different types of unemployment that economists
consider:
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Frictional
Seasonal
Structural
Cyclical
FRICTIONAL UNEMPLOYMENT
• Occurs when people take their time to find a job
• Could be after a lay off or finishing with college
• Unsatisfied with current job and wish to seek better
employment
• The time period while they are actively seeking work
is considered frictional unemployment
SEASONAL UNEMPLOYMENT
• Occurs when industries slow down or shut down for
a season workers are laid off temporarily
• Construction workers/farmers
• NOT counted by BLS in unemployment statistics
because these workers are not ACTIVELY seeking
new employment, they are waiting for their next
employment cycle
STRUCTURAL UNEMPLOYMENT
• Occurs when workers skills do not match the jobs
available
• As the structure of the economy changes so does
the skills needed to succeed in job market
• Examples: home deliveries of Ice, statistics
generated by hand, phone books, seamstresses,
etc….
STRUCTURAL UNEMPLOYMENT
STRUCTURAL UNEMPLOYMENT
• Causes of it:
• Development of new technology
• Discovery of new resources
• Globalization
• Lack of Education
• Labor pool not keeping up
CYCLICAL UNEMPLOYMENT
• Occurs when unemployment rises during economic
downturns and falls when the economy improves
• During recessions, demand for goods/services
drops, employees are laid off (Cost-Push inflation)
• During economically prosperous times, demand
increases, and more workers are hired
• Demand for goods has a direct correlation to
demand for labor
FULL EMPLOYMENT
• Zero unemployment is not an achievable goal for a
market economy
• In a properly functioning market economy an
unemployment rate of 4-6% is normal (good)
• Underemployed: those working jobs which they are
overqualified for or working part time when they
desire full time
• How will Affordable Care Act affect employment?
OTHER WORKERS…
• Discouraged workers: people who give up seeking
employment during long recessions
• These workers are not calculated into
unemployment rate because they are not actively
seeking work
BUSINESS CYCLE
BUSINESS CYCLE
• Recession – contraction in economic activity. Generally
6-18 months.
• Depression – at a point where economic activity has
reached its lowest level. Long lasting Recession (over 18
months).
• Recovery – Expansion/increased economic activity; end
of recession/depressions
• Based on supply and demand!
• The Business cycle is completely normal in our economy.
We just want to avoid depression and get out of
recessions quickly
BUSINESS CYCLE
• Economists agree that they cannot predict when or
how long each phase will last
• Only certainty is that if an economy is growing, it will
eventually face a downturn and then bounce back
CAUSES OF BUSINESS CYCLE
• Investment
• After a series of large expansions and purchases, businesses
stop investing in themselves for a while, until needed again
• Interest rates and credit
• When interest rates are low and credit is readily available,
more businesses are willing to take loans for expansion
• Consumer expectations
• When consumers worry about their finances they start
“saving for a rainy day” which can cause a contraction
• Inflation/Unemployment
• External shocks
• Wars, sanctions, disruption in oil supply
EXIT TICKET
• Identify the four types of unemployment
• Identify the three phases of the business cycle
POVERTY
• What causes poverty?
• What do you think poverty really is?
• What is currently being done about it?
• What do you think should be done?