Aim: Why does Unemployment occur?

1. Aim: Why does Unemployment occur? What are 3 reasons that people are unemployed?

2. Articles from class • http://www.bls.gov/opub/ooq/2013/summer/art03.pdf • http://www.learnvest.com/2013/07/the-college-majors-that-earn-the-most/ • http://www.thinkadvisor.com/2013/06/17/30-best-paying-college-majors-2013?page=2 • http://content.time.com/time/business/article/0,8599,1858773,00.html

3. Causes of Unemployment • Disappearing of low skill jobs • Lack of job opportunities • People lose their jobs (layoffs, cutbacks)

4. Unemployed? What does it mean? • In order to be considered unemployed you must be actively looking for a job

5. Unemployment

14. Who are the Unemployed? • Minorities, women, and young people suffer most from unemployment • Rate of unemployed African-American men is double the rate of unemployed white men • Women are more likely to be unemployed than men • African- American teenagers are the group with the highest unemployment rate

15. Measuring Unemployment A. The Unemployment Rate- the number of unemployed individuals divided by the total number of persons in the civilian labor force 1. tends to rise dramatically during a recession and then come down afterwards 2. does not count those who have become frustrated or discouraged that they have stopped looking for work. 3. Does not include people who are employed part time.

16. Types of Unemployment A. Frictional Unemployment- unemployment caused by workers who are “between jobs” for one reason or another. B. Structural Unemployment- occurs when a fundamental change in the operations of the economy reduce the demand for workers and their skills. 1. people’s taste change, and certain goods and services are no longer in demand 2. government may change the way it does business a. close military base

17. Types of Unemployment C.Cyclical Unemployment- unemployment directly relates to swings in the business cycle 1. unemployed workers generally get their jobs back when the economy recovers D.Seasonal Unemployment- resulting from changes in the weather or changes in demand for certain products • Technological Unemployment- caused when workers with less skills, talent, or education are replaced by machines that do their job 1. Automation-production with mechanical or other processes that reduce the need for workers

18. How does the Government Try to Lower Unemployment? • Whenever unemployment gets too high – usually above 6 percent – the federal government often tries to step in and create jobs • The two major tactics the government can employ in its job-creating strategy are changes to its monetary policy and/or changes to its fiscal policies • Monetary policy is controlled by the Federal Reserve Bank of the United States • One tool is lowering the interest rates in the overall economy so that it is cheaper for banks and businesses to borrow money. • Lower interest rates also decrease individual borrowing costs, inducing consumers to spend more money.

19. The second tool is increasing the amount and/or the availability of money in circulation by buying and selling various treasury bills, and bonds. • As more money enters the economy, business expands and can hire more workers. • Fiscal Policies used to combat high levels of unemployment • Cut taxes for businesses and individuals to increase spending and stimulate economic growth. • Increase government spending in targeted industries in order to spur employment. • Hire workers to build things like mass transit systems or provide services like infrastructure upkeep and repair. • Provide benefits to unemployed workers so they can spend on basics like food, clothing and housing

20. American Jobs Act • http://www.whitehouse.gov/economy/jobsact • Fox News on Act • http://www.youtube.com/watch?v=unQvmSTpDS4 • Pres speech on Act • http://www.youtube.com/watch?v=fvmUOqCWu64

21. Poverty and the Distribution of Income • Distribution of Income- can be analyzed by looking at households, families, single individuals, geographic regions, race and ethnic origin, educational attainment • Reasons for inequality- education, wealth, discrimination, ability, and gender • Poverty- the standard of living, compared to the income that people earn. Poverty Line was $26,338 in 2008

27. Living in poverty • http://www.povertyusa.org/the-state-of-poverty/poverty-usa-tour/

28. Full Employment- DOES NOT MEAN ZERO UNEMPLOYMENT A. The lowest possible unemployment rate with the economy growing and all factors of production being used as efficiently as possible. 1. Today most argue that full employment is reached when the unemployment rate drops below 5% a. can be raised or lowered according to the economy (recession or wartime economy)

29. Labor Force and Changes • 1950’s and earlier High School Diploma led to Jobs people held until retirement. Not Any More!! • Human Capital is required today – Education, Training, and or Experience. • College educated workers earn more than those with only high school diplomas. • The more college the higher the wages.

35. Wage Discrimination • Occurs when people with the same job, same skills, and education, same job performance, and same senority receive unequal pay. • Some companies have paid women and minorities lower wages.

42. How do Unions help workers?

43. What is a union? A union is a group of workers who form an organization to gain: • Respect on the job, better conditions • Better wages and benefits, • More flexibility for work and family needs, • Protection for job injuries • A voice in improving the quality of their products and services. • http://www.google.com/search?q=unions+good+or+bad&tbo=p&tbm=vid&source=vgc&hl=en&aq=2&oq=unions

44. How do people form a union? • When workers decide to come together to improve their jobs, they work with a union to help them form a local chapter. • Once a majority of workers shows they want a union, sometimes employers honor the workers’ choice. • Often, the workers are forced through a government representation process to hold an election. • If the workers win their union, they negotiate a contract with the employer that spells out each party ’s rights and responsibilities in the workplace.

45. Does the law protect workersjoining unions? • It ’s supposed to, but too often it doesn't. • Under the law, employers cannot discriminate against or fire workers for choosing to join a union. • For example, it ’s illegal for employers to threaten to shut down their businesses, fire employees or take away benefits if workers form a union. • However, employers routinely violate these laws, and the penalties are weak or nonexistent.

46. What kinds of workers areforming unions today? A wider range of people than ever before, including many women and immigrants, are joining unions — • doctors and nurses, poultry workers and graduate employees, home health care aides and wireless communications workers, auto parts workers and engineers, to name a few

47. What have unionsaccomplished for all workers? • Unions have made life better for all working Americans by helping: • to pass laws ending child labor, • establishing the eight-hour day, • protecting workers’ safety and health • and helping create Social Security, • unemployment insurance • and the minimum wage

48. History of American Unions • With workers recognizing the power of their employers, the number of local union organizations increased steadily during the mid-19th century. • In a number of cities, unions in various trades joined together in citywide federations. • The Nation Labor Union, persuaded Congress to pass an eight hour day for Federal workers. • Never very strong, it was a casualty of the sweeping economic depression of 1873.

49. History of American Unions • Knights of Labor formed in 1869 by Uriah Stephens and expanded rapidly under the leadership of Terrance Powdery. • Membership was open to all workers, whether they be skilled or unskilled, black or white, male or female. • The Knights achieved a membership of nearly 750,000 during the next few years • The skilled and unskilled workers who had joined the Knights in hope of improvement in their hours and wages found themselves fragmented by the rift between skilled and unskilled workers. • The Knights declined after the Haymarket Square riots. In the riot members of the Knights of Labor where accused of throwing a bomb which killed police officers. • The Knights, already fragmented, where faced with enormous negative publicity, and eventually disbanded

50. History of American Unions • The American Federation of Labor was founded by Samuel Gompers in 1886. • Gompers, he entered the cigar-making trade and became a leader of his local union and of the national Cigar Makers Union. • The AFL was a federation that organized only unions of skilled workers.