Low Unemployment

1. Low Unemployment Chapter 17 Introduction IB Economics

2. What is unemployment? Take 3-5 minutes to read the article excerpt on page 203. In your notes, write the three points from the article you think are important.

3. Important Points • Unemployment means just what it says—”jobless” • A change in the unemployment rate of even a tenth of a percentage point is considered to be “news” • The unemployment rate is affected by how many jobs are created in the economy • The number of jobs created will vary in different industries (e.g. manufacturing or services) and may be different for different groups of people (e.g. men or women) • While a country will publicize a national unemployment rate (Canada = 6.4%), the rates in different regions will differ from this national average. • Many things will affect the unemployment rate, e.g. exchange rates, cost of raw materials, and international economic conditions • The unemployment rate will have an effect on wage rates

4. What is unemployment? According to the International Labour Organization (ILO), unemployment is defined as: People of a working age who are without work, available for work, and actively seeking employment.

5. Who is unemployed? • Is your retired grandfather unemployed? • Is a parent who stays home with his or her kids unemployed? • A thief serving time in prison lost his job when he was convicted. Is he unemployed? • An woman serving in the Armed Forces is deployed overseas. Is she employed? • Is a full-time primary school student unemployed? • Is a full-time college student unemployed? • Are any of you unemployed?

6. How is unemployment measured? The unemployment rate is the number of people who are unemployed expressed as a percentage of the total labour force. People are part of the labour force if they are of working age and are employed or actively seeking employment.

7. Are any of these people part of the labour force? • your retired grandfather • a parent who stays home with his or her kids • A thief serving time in prison • An woman serving in the Armed Forces who is deployed overseas • a full-time primary school student • a full-time college student not looking for work

8. Problems with measuring unemployment • Inaccuracies in data • Inconsistency in definitions across different countries, for example Austria/Switzerland and Britain/Belgium • Hidden unemployment • People who have given up the search for work • Part-time workers who would like to be full-time • People who are greatly overqualified for their current jobs

9. Practice We’re going to conduct an unemployment simulation. First, copy the following table into your notes:

10. Practice Assume our classroom is an economy. The number of students in class today would be our total population. You will receive a card with a situation on it, such as, “You are working full time”. Take a second and make up a story for yourself, such as “I work at the Berlin Zoo as a full-time unicorn trainer.” Do not let anyone else see your position.

11. Practice You will now walk around and interview everyone else in our economy. Pretend we’re at a boring party and you want to know what everyone else does. You will ask them, “So, what do you do for a living?” (This is what happens at boring parties.) Do not tell them, “I am working full-time”, but respond with the story you have made up for yourself. “I work at the Berlin Zoo as a full-time unicorn trainer.” Feel free to ask one or two follow up questions if needed or just for fun.

12. Practice Record your data as you talk to people. Make sure you have spoken to everyone in our class. Once you’re finished interviewing everyone, sit down and fill out your chart. Remember the formula for the unemployment rate would be x 100

13. Practice You have 10 minutes to speak to everyone and complete your table.