tailieunhanh - Lecture Economics (9/e): Chapter 34 - David C. Colander

Chapter 34 - Jobs and unemployment. The goals of this chapter are: State how the unemployment rate is measured and describe the debate about that measure; explain Okun's rule of thumb and summarize the debate about the appropriate target rate of unemployment; explain why unemployment is more than a technical concept but one that involves normative judgments; discuss the advantages of, and problems with, a government-guaranteed minimum job program. | A man willing to work, and unable to find work, is perhaps the saddest sight that fortune’s inequality exhibits under this sun. ―Thomas Carlyle Jobs and Unemployment Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter Goals State how the unemployment rate is measured and describe the debate about that measure Explain Okun’s rule of thumb and summarize the debate about the appropriate target rate of unemployment Explain why unemployment is more than a technical concept but one that involves normative judgments Discuss the advantages of, and problems with, a government-guaranteed minimum job program 2 Calculating the Unemployment Rate The labor force refer to those people in an economy who are willing and able to work The unemployment rate is measured by dividing the number of unemployed individuals by the number of people in the civilian labor force and multiplying by 100 If the total unemployed stands at 12 million and the labor force stands at 150 million, the unemployment rate is: 12 million / 150 million = X 100 = 8% 3 How Accurate Is the Official Unemployment Rate? Discouraged workers are people who do not look for a job because they feel they don’t have a chance of finding one The underemployed are part-time workers who prefer full-time work The unemployment rate does not include discouraged workers or the underemployed Including discouraged workers and the underemployed, unemployment would have been about 18 percent in 2012 instead of falling to percent 4 How Accurate Is the Official Unemployment Rate? Some Classicals contend that the way the BLS measures unemployment exaggerates the number of those truly unemployed Economists use supplemental measures to give them insight into the state of the labor market Labor force participation rate, which measures the labor force as a percentage of the total population Employment-population ratio, which is the number of people who are working as a percentage of . | A man willing to work, and unable to find work, is perhaps the saddest sight that fortune’s inequality exhibits under this sun. ―Thomas Carlyle Jobs and Unemployment Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter Goals State how the unemployment rate is measured and describe the debate about that measure Explain Okun’s rule of thumb and summarize the debate about the appropriate target rate of unemployment Explain why unemployment is more than a technical concept but one that involves normative judgments Discuss the advantages of, and problems with, a government-guaranteed minimum job program 2 Calculating the Unemployment Rate The labor force refer to those people in an economy who are willing and able to work The unemployment rate is measured by dividing the number of unemployed individuals by the number of people in the civilian labor force and multiplying by 100 If the total unemployed stands at 12 million and the labor force .