1 / 10

AP Macroeconomics

AP Macroeconomics. Unemployment. Unemployment. Start with the Population of the Country (310 million) Unemployment is the percentage of people who do not have jobs that are in the labor force. Let’s figure out which groups of people are NOT in the labor force!  Not in Labor Force Kids

sorley
Télécharger la présentation

AP Macroeconomics

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. AP Macroeconomics Unemployment

  2. Unemployment • Start with the Population of the Country (310 million) • Unemployment is the percentage of people who do not have jobs that are in the labor force. • Let’s figure out which groups of people are NOT in the labor force!  • Not in Labor Force • Kids • Military personnel • The institutionalized • Stay at home Moms and Dads • Full-time students • Retired people • the DISCOURAGED (to be in the labor force the person has to be LOOKING for work)

  3. Labor force • Number of people in a country that are classified as either employed or unemployed • Labor Force Participation Rate • % of working age population in the labor force (U.S. is approx. 63%)

  4. Unemployment • Employed • People 16 years and older that have a job. • It doesn’t matter if it’s part-time or full-time, as long as they work at least 1 hour every 2 weeks • Those on sick leave, strike, vacation • Unemployed • People 16 years and older that don’t have a job, but have actively searched for a job in the last 2 weeks • Unemployment rate = # of unemployed / # of people in labor force • Remember that the labor force is made up of the employed AND unemployed. • Also remember that to be counted as unemployed the person has to have LOOKED for a job

  5. Types of Unemployment • Frictional • “between jobs”, voluntary, good for individuals and society because they are looking for a “better” job. • Example: Someone quits their job to go back to school. After finishing school they look for a job. While they’re looking they’re unemployed. • Example—quitting the minimum wage job at McDonald’s to find a job as a teacher’s aide.

  6. Types of Unemployment • Seasonal (can be counted as Frictional) • Mall Santas from January through October, Schlitterbahn life-guards, concession stand operators at Texans’ games from February through July, golf teachers in Alaska during January (it’s cold and no one plays golf so no one needs a golf teacher!) • Migrant workers • Brick layers in Boston from December through February

  7. Types of Unemployment • Structural • Associated with lack of skills or declining industry • (ex. High school dropouts who can’t find a job, type-writer repairmen). • Think “Creative Destruction” however very painful to people

  8. Types of Unemployment • Cyclical • Associated with downturns in business cycle. • Bad for society and individuals. • We have loads of cyclical unemployment now.

  9. What is Full Employment? • Occurs when there is no cyclical unemployment present in the economy • Associate with the Natural Rate of Unemployment (NRU) (AKA full employment). • The level of unemployment experienced when the economy is producing at its full potential. • The United States’ NRU is approx. 3%-4% (Maybe 5%) • Associate Full Employment (FE) with the PPC and the long-run aggregate supply (LRAS). We’ll talk about LRAS later.

  10. Why Unemployment is bad • Okun’s Law- Every 1% of u% ABOVE the NRU causes a 2% decline in Real GDP. • Our unemployment is about 3.5% above NRU right now. • That means we’re giving up 7% of GDP • 7% of 16 trillion is $1.120 TRILLION!!! • The burden of unemployment is not equally shared in society. • It causes social unrest and is hard on individuals and families.

More Related