Transcript
Bellringer
1. Do you think everyone should be guaranteed a job? Why or why
not?
2. Do you think everyone should be paid the same salary? Why or
Why not?
Why Unemployment?
• You may be unemployed
• Problem for society
• Can cause recessions
• CRIME!
Unemployment’s effect on GDP•GDP = C + I + (Exports-Imports) + G• Lower Consumer Spending• Lower investments, causes lower capital for new businesses• Lower Exports• Lower Imports• Lower Government spending because lower tax revenues
World Wide Unemployment 2005
Unemployment Rate
• GDP = C + I + G + (Ex-Im)
• GDP UP Unemployment Down
• GDP Down Unemployment UP
Labor Force
• All 16 years and older who can work
• “LF”
Not included in Labor Force
• Children
• Fulltime Students
• Military
• Physically Disabled
• Mentally Disabled• Prisoners (over 2 million right now!)
• Discouraged Workers
• Retirees
Unemployment Rate Calculation
• Simple calculation
• # unemployed in labor force• # in labor force
Always a %Higher the % the worse it is for the
country
100
Calculate Unemployment Rate for class
Unemployment Rate Key Economic Indicator Labor force = people who
can workNot included in LF, retired, disabled,
discouraged workers, homemakers, students, prison
# of labor force unemployed
# in labor force
For example: LF = 200 million10 million unemployed
= unemployment rate
10 million
200 million= .05 X 1005% U. Rate
Economic Event’s Name?Effect on GDP?
United States Unemployment Rate 2001
Total civilian population 212,000,000Not in Labor force 71,000,000
(retired, students, individuals choosing not to work)
Labor force 141,000,000
Employed 134,000,000
Unemployed 7,000,000
Unemployment Rate = 7 million = 0.049 X 100 =
141 million 4.9%
Acceptable Unemployment• “Full” Employment 3-5 % Why not 0%?
• Frictional unemployment “ok”
Unemployment practiceCountry X has a labor force of 1 million
225,000 are unemployed and looking
500,000 are discouraged workers
Country Y has a labor force of 100 million
3 million are unemployed
1 million are disabled or in prison
Country Z has a labor force of 10 million
1.5 million are unemployed
500,000 are disabled or in prison
USA Unemployment
Arizona’s Unemployment Rate
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