1. How has unemployment affected your life? Do you know anyone who has lost their job? Is unemployment only the problem of the person looking for the job? Who else’s problem is it? 1 Take out Spiral. Answer Question, No Talking What will we learn today? What will we learn today? 12.4.1 Labor unions, procedures, benefits for their members, effects of unionizations, the minimum wages, and unemployment insurance. 12.4.4 Explain the effects of international mobility of capital and labor on the U.S. economy. 12.5.2 Significance of unemployment rate, new jobs created monthly, inflation and deflation, and rate of economic growth. Unit: Economic Challenges

2. Unemployment No matter how strong an economy is, some people will always be unemployed. $ When an economy is working properly the unemployment rate will be at 4-6%. Today’s unemployment rate: 6.7% nationwide. 8.3% in CA. During the Great Depression: 25% 2

3. Seasonal and Structural Unemployment Seasonal unemployment: people lose their jobs because of schedules, or industries slow down or shut down. Ex. Christmas jobs Structural unemployment: people can’t get a job because they lack skills or their skills do not match the jobs available. Ex. Degree in history but need math teachers Today in the US, there are much more service jobs and much less manufacturing jobs (outsourcing). 3

4. Underemployment $ Underemployment is when someone is working at a job for which they are overqualified, or working part-time when they would rather be working full- time. Ex. You have a degree and you are working at the carwash! If you have a job right now, you might feel underemployed. A lot of Americans who were laid off from their jobs this past year have taken crappy work. They aren’t reported in the unemployed statistics, but they are underemployed. 4

5. Question 5 190819552003 Cost$850$3,030$19,075 Hours Worked 4,6961,6381,240 Why didn’t the prices stay the same?

6. Inflation! 6 190819552003 Cost$850$3,030$19,075 Hours Worked 4,6961,6381,240 Why didn’t the prices stay the same? Clip: AP 19:26 – 22:20

7. Inflation Inflation is a general increase in prices over time. The Consumer Price Index (CPI) is computed each month by the Bureau of Labor Statistics to measure average prices of the “market basket” or certain goods over time, to gauge inflation. $ The “market basket,” that is used by the Bureau of Labor Statistics to calculate prices is made up typical goods and services for an urban household. The government tries to control inflation because if it happens too fast it can be a very bad thing. Hyperinflation: when inflation gets out of control; think Germany after WWII 7 1923-24: A German woman feeding a stove with currency notes, which burn longer than the amount of firewood they can buy

8. A Hungarian man sweeps paper notes out of the gutter 8

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13. What Causes Inflation? 1. $ Too much money being printed 2.$ Too much demand exceeds supply (often happens during war time) 3.$ Producers raise prices to meet costs Also: Deflation: prices drop 13

14. Effects of Inflation High inflation is a major economic problem. 1. Purchasing Power = the dollar loses value. The dollar does not buy the same as it did in years past 2. Interest Rates = bank rate=inflation rate-savers break even : Bank rate < interest rate- savers lose 3. Income = wage increase = inflation rate-income stays the same : fixed income < inflation rate- workers lose money

15. Poverty About 12% of Americans live in poverty. The poverty threshold is the income level below which income is sufficient to support a family or household. In 2004, the poverty rate for a single parent with one child was $12,490. 15 Clip: SM 6:17 – 9:04

16. EDUCATION = MONEY 16

17. What Are Some Causes Poverty? Lack of Education: less school you have, less money you make. Location: if you live in the inner city, you aren’t going to make as much money as those living in suburbs. Racial and Gender Discrimination: white workers generally earn more than other races, and men earn more than women. Shifts in Family Structure: Children from single parents or divorced families are more likely to live in poverty. 17 Clip: PoH 1:27:00

18. How Do We Deal With Poverty? Food stamps: government issued coupons that can be exchanged for food Welfare: government aid to the poor Workfare: a government program that requires work in exchange for temporary assistance Social welfare programs like these above are also known as entitlement programs, because people are entitled to them if they meet certain requirements. How does the gov. pay for these programs? TAXES ! 18 Clip: MDB 1:10:00

19. The Econ Song Take information from a chapter of the book and convert the information into the beat of your favorite song. You are basically re-teaching your assigned chapter, so you need to be informative. That being said: have fun with this and be comfortable! The basics: - groups no bigger than four or five (people absent on presentation day affect your grade) - choose your chapter from a list provided by me - figure out what song you want to use - take a look at your chapter and start turning the info into notes / song. You must turn in a TYPED copy of your song (include a title) - anything inappropriate or use of bad language will result in an F on the project. Seriously. 19

20. Chapters Ch. 1: What is Economics? Ch. 2: Economic Systems Ch. 3: American Free Enterprise Ch. 4: Demand Ch. 5: Supply Ch. 6: Prices Ch. 7: Market Structures Ch. 9: Labor Ch. 13: Economic Challenges 20