Employment and Unemployment Today's topic, in many ways, is the flip side of what we did Friday with inflation.
Naked Economics reading: Please try and get through Chapter 2, "Incentives Matter," by next class. I'll have your next blog entry posted by then. You'll have until Monday's class to get that posted for credit. The "grace period" (not to be repeated) on Entry #1 ends at the beginning of today's class...
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.
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 kind 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.
BONUS SITE: Hey, Gorgeous, Here's a Raise... Here's a weird coincidence. I wanted a reason to link to a example from Steven Landsburg's Everyday Economics. I was looking at The Week (great periodical if you're busy but want to stay informed), and the work of Daniel Hamermesh and Jeff Biddle was mentioned. Here's Landsburg's take on the topic... Read it. We'll talk.