Just like Congress, we'll begin our day considering the fate of the United States auto industry. We'll first debate the bailout, and then we'll shift our attention to jobs and unemployment.
Your Blog Entry #5 for Naked Economics should be posted. We can talk about things that you found there.
Debate - Auto Industry Bailout
- Why a "Big Three" Failure Wouldn't Kill U.S. Auto Making The New York Times
- A road map for Detroit - Christian Science Monitor
- Why the Dems' Drive to Aid Detroit is Stalling Out - Time
- Congress Remains Divided on Bailout - The New York Times
Employment and
Unemployment: Today's topic, in
many ways, is sort of the flip side of what we did with inflation.
Defining
"unemployment: The unemployment rate is the percentage
of the U.S. labor force that is unemployed. It is calculated by dividing the
number of unemployed individuals by the sum of the number of people unemployed
and the number of people employed. An individual is counted as unemployed if
the individual is over the age of 16 and is actively looking for a job, but
cannot find one. Students, those individuals who choose to not work, and
retirees are therefore not counted in the unemployment rate.
The Current State of Unemployment: The most recent figures we have take us through December. This is a lot of numbers, but just browse it for a couple minutes.
Since I can't figure out how to get charts onto the blog, follow this link to my old page and scroll down to the charts... Here are the newest charts from the Bureau of Labor Statistics.
Questions to consider and discuss:
- What surprises you (if anything) about the statistics and graphs above? What explanations do you have for the discrepancies?
- In January 2002, a falling unemployment rate
was accompanied by a significant fall in employment. How can the number of
individuals employed fall and the unemployment rate fall at the same time?
Unemployment in your backyard (or anyone else's) ... You can go to the Bureau of Labor Statistics website and check the Local Area Unemployment Statistics for your city and/or state.
Answer these questions:
1. Is unemployment in our area higher, lower, or roughly the same as the national average? What about your favorite vacation spot? Your grandma's hometown?
2. What factors contribute to our area's unemployment rate? (Think about recent news...)
Which industries have expanded?
Which industries have contracted?
3. Will the recent changes affect you?
4. If avoiding inflation
were your highest concern, where should you move? If you like the idea of
unemployment, what cities would you recommend for your next move?
Unemployment Insurance: Go to the website for the Minnesota WorkForce Center. Browse through the links and see what kinds of benefits are available in this state.
- Do you think unemployment benefits are
appropriate in Minnesota?
- What changes, if any, would you make?
- Do you think these benefits are a disincentive to work?
The Relationship between Inflation and Unemployment: The Phillips Curve - Economists have long claimed an inverse relationship exists between unemployment and inflation. This "Phillips Curve" quickly gets very technical, but you can see the basics at this link. Browse around for a bit.
Please have Chapter #6 of Naked Economics, "Productivity and Human Capital," read for Monday's class.
