Unemployment rate 2012

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

• http://www.indexmundi.com/map/?v=74

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