Unemployment What are the different types of unemployment

Unemployment • What are the different types of unemployment? • How are unemployment rates determined? • What is full employment? Chapter 13 Section Main Menu

Vocabulary • Frictional Unemployment • Seasonal Unemployment • Structural Unemployment • Cyclical Unemployment • Unemployment rate • Census • Full Employment • Underemployed • Discouraged Worker Chapter 13 Section Main Menu

Unemployment Video Part 1 Video Part 2 Chapter 13 Section Main Menu

Types of Unemployment 1. 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 Chapter 13 Section Main Menu

Structural Unemployment Occurs when workers' skills do not match the jobs that are available. Technological advances are one cause of structural unemployment Chapter 13 Section Main Menu

Seasonal Unemployment • Occurs when industries slow or shut down for a season or make seasonal shifts in their production schedules Chapter 13 Section Main Menu

Cyclical Unemployment that rises during economic downturns and falls when the economy improves Chapter 13 Section Main Menu

What Kind of Unemployment is It? 1. John was not satisfied with his job as a teacher so he left his job to begin looking for a position as a bartender. What type of unemployment is this? (frictional, structural, seasonal, or cyclical) Chapter 13 Section Main Menu

Answer Frictional Chapter 13 Section Main Menu

What type of unemployment is it? Adam worked at an auto factory but lost his job because a robot was invented to do his work. What type of unemployment is this? Chapter 13 Section Main Menu

Answer Structural Chapter 13 Section Main Menu

What type of unemployment is it? The current unemployment rate in the U. S. is 9. 6%. This is a huge increase from the 4. 5% rate at the beginning of 2007. Which type of unemployment do you think is causing the majority of the increase? (structural, seasonal, frictional, cyclical) Chapter 13 Section Main Menu

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. Chapter 13 Section Main Menu

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. Chapter 13 Section Main Menu

Full Employment • 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 parttime when they desire full-time work. Chapter 13 Section Main Menu

Discouraged workers are people who want a job, but have given up looking for one. Full employment is the level of employment reached when there is no cyclical unemployment. (4 -6 Percent) Chapter 13 Section Main Menu

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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 connect to the PHSchool. com link for this section? Click Here! Chapter 13 Section Main Menu

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 connect to the PHSchool. com link for this section? Click Here! Chapter 13 Section Main Menu

Assignment You have been given one of the types of unemployment to write about. Imagine that you are a person experiencing that type of unemployment. 1. On a sheet of paper Identify the type of unemployment and create a profile of an imaginary character (name, background, marital status, children, former occupation, etc. . ) 2. Write three diary entries from the perspective of this imaginary person. The entries need to explain how the person became unemployed, how the person feels about being unemployed, and the actions she or he has taken since becoming unemployed Chapter 13 Section Main Menu

Inflation • What are the effects of rising prices? • How do economists use price indexes? • How is the inflation rate calculated? • What are the causes and effects of inflation? Chapter 13 Section Main Menu

Vocabulary • Inflation • Purchasing Power • Price Level • Inflation Rate • Consumer Price Index • Market Basket Chapter 13 Section Main Menu

The Effects of Rising Prices • Inflation is a general increase in prices. • Purchasing power, the ability to purchase goods and services, is decreased by rising prices. • Price level is the relative cost of goods and services in the entire economy at a given point in time. Chapter 13 Section Main Menu

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. Market Basket – A representative collection of goods and services. Chapter 13 Section Main Menu

Consumer Price Index Year 2 Year 1 $103. 00 $100 There was a 3% increase in the price for the market basket of goods. (same goods, more money) Chapter 13 Section Main Menu

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Inflation • 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 Chapter 13 Section Main Menu

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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. Chapter 13 Section Main Menu

• 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. • Savings $100 • Interest 3% • End of Year $103. 00 Chapter 13 Section Main Menu

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. Chapter 13 Section Main Menu

Inflation hurts those on fixed income the most. Consider the statement above. Take the next 5 minutes to write a paragraph explaining why it is that inflation hurts people on a fixed income the most. When finished, discuss your response with a partner. Chapter 13 Section Main Menu

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. Want to connect to the PHSchool. com link for this section? Click Here! Chapter 13 Section Main Menu

Activity • Fresh out of college you were hired into an entry-level job, making a salary of $40, 000 per year. You really like your job, and, after your first year, your boss offered you a $1000 raise. The only problem is that inflation is currently at 4%. – Should you take the pay raise? Why or why not? – Working in groups of two, construct a short (20 -30 seconds) persuasive argument for why this pay raise is insufficient. Chapter 13 Section Main Menu

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. Want to connect to the PHSchool. com link for this section? Click Here! Chapter 13 Section Main Menu

Section 3 - Poverty • Objectives: • Define who is poor according to government standards • Describe the causes of poverty • Analyze the distribution of income in the U. S. • Summarize government policies intended to combat poverty Chapter 13 Section Main Menu

Vocabulary • Poverty Threshold • Poverty Rate Chapter 13 Section Main Menu

Poverty Threshold – The income level below which income is insufficient to support a family or household. • In 2004 – The poverty threshold for a single parent under the age of 63 with one child was $12, 490 • A family of 4 with 2 children - $18, 850 Chapter 13 Section Main Menu

• Poverty Rate – The percentage of people who live in households with income below the official poverty level. Chapter 13 Section Main Menu

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Causes of Poverty • Lack of Education • Location • Racial and Gender Discrimination • Economic Shifts • Shifts in Family Structure Chapter 13 Section Main Menu

Income Inequality Chapter 13 Section Main Menu