Introduction
|
Jobless
Jobs created in the economy
|
What is unemployment and how
is it measured
|
People of the working agge
who are without work. available for work and activly seeking owrk
Labor force- economiucaly
active population
Different ways to measure-
exp(people claiming benefits.
|
Hidden unemployment
|
People given up on looking
Part time jobs, who dont
want part time
Working a job they are
greatly over qualified for
|
Distribution of unemployment
|
Inequalities inside the
economy, disparities
- geographical disparities:
some parts of the country are more prosperous
- age disparities:
unemployment rates in the under- 25 age group are hiugher thn the national
average
- ethnic differences:
Ethinic minorities ofton suffer from higher unemployment, (may be from
prejudice)
- gender disparities:
unemplyment among woman hhas been higher due to prejudice
|
Costs of unemployment
|
Important because of the
high costs
- costs to the unemployed:
receive less income, lower standard of living, dejected, stress and erosion
of mental health
- areas of unemployyment
there are poverty, homlessness, higher rates of crime and gang activity
Connectted not solely
-Costs of unemployment to
the economy as a whole: less output, government spening
|
what are the main factos
affecting the level of unemployment
|
Inflows and out flows dor
unemplyment
Inflows- people beoming
unemployed
·
peopl;e who have lost their jobs
·
people who have resigned
·
people who hav left school and not found work
·
people who are trying to return to work after
having left it
·
people who have immigrated into the country
but have not yet found work
outflows- no longer
unemployed
·
people who find jobs
·
people who retire
·
people who go back into education
·
people who choose to stay at home
·
people who emigrate
·
people who give up search for jobs
·
people who die
|
Causes of unemployment
|
- the labour market
Real wage W/P will be equal to the equilibrium real wage in the classical model Without government intervention and trade unions, the labor market will always be in equilibrium in the classical model. This means that the real wage will be equal to the equilibrium real wage - the level of real wage which will equilibrate the labor demand and the labor supply.
Shows demand and supply for
all labour
|
Disequilibrium unemployment
|
Real wage unemmplyment
Trade unions and government
are interferein g with the market thus the wages are set abnove equilbrium,
preventing market from clearing
|
Solution to real wage
unemployment
|
Reduce trade unions ability
to negotiate higher wages
Lower minimum wage
Effect poor workers, greater
inequity
|
Demand deficent-
unemployment or cyvlical unemployment
|
|
Solution to demand defecient
unemployment
|
Due to a low level of eggregate demand. use keynesian demand managment
policies
Lower taxes. decrease interest rates, increasing market supply
|
Equilibirum unemployment
|
People are unwilling or unable to take the jobs that are available
Lack education, or unwilling
Gap becomes smaller as higher wages are offered
·
frictional
·
seasonal
·
structural
|
Frictional unemployment
|
In between jobs, left education waiting.
Not considered bad
-solutions: lower unemployment benefits
Improbving flow of information
|
Seasonal unemployment
|
Unemployed on a seasonal basis
Tourisms works in seasons
Fix:take different jobs during off season- information
|
Structural unemployment
|
Worst type
Structural
unemployment is a form of unemployment resulting from a mismatch between demand in the labour
market and the skills and locations of the workers seeking employment. Even
though the number of vacancies may be equal to, or greater than, the number
of the unemployed, the unemployed workers may lack the skills needed for the
jobs, or they may not live in the part of the country or world where the jobs
are available.
·
autaumation-reduces
need for labour
·
lower cost of labour
in foreing contries
·
changes in
consumer taste (coal)
|
Solutions
|
·
A change in the
education system-
·
adult
retraining programs
·
give subsidies
to firms to higher more people
·
ecourage people
to move to an area
·
apprenticeship
programs
|
Solutions to structural
unemplyment/ marketbased
|
·
reduce
unemployment benfits
·
deregualtion of
labor market
burden- people lose their benefits and now have even worse standards of
living
worst conditions for labour
inequity
|
Are demand sife policies or
supply side policies more effective in reducing unemployment
|
Both good
|
Crowding out
|
Problem with running a deficient
Lowers incentive for businesses to invest
Gov got opposite of what they wanted
|
lol
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Monday, May 14, 2012
low unemployment
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