1. Virtual Econ Video: Unemployment

2. 1. How is unemployment measured? 2. How is the unemployment rate calculated? 3. What is the significance of the unemployment rate on the economy? 4. What is the relationship between the unemployment rate and economic growth?

3. 1. Employed = 2. Unemployed = 3. Is a person retired receiving Social Security unemployed? 4. Is a disabled veteran unemployed? 5. Labor force participation rate: 6. LF Formula: 7. Unemployment rate: 8. Unemp. Formula:

4. 1. Employed = person has a job 2. Unemployed = actively looking for work who do not currently have a job 3. Is a person retired receiving Social Security unemployed? 4. Is a disabled veteran unemployed? 5. Labor force participation rate: % of population aged 16 or older that is in the labor force 6. LF Formula: 100 x (LF)/civilian population 16 and older 7. Unemployment rate: % of the total number of people in the labor force who are unemployed 8. Unemp. Formula: 100x (# unemployed/# Labor Force)

5. http://www.tradingeconomics.com/united-states/unemployment-rate http://www.bls.gov/bls/unemployment.htm http://www.cbsnews.com/video/watch/?id=6987699n&tag=contentMain;content Aux http://www.youtube.com/watch?v=hwWGzQ_FUtQ&feature=related

6. 1. What is happening in the economy when the unemployment rate is low? 2. What is happening in the economy when the unemployment rate is rising? 3. What is happening in the economy when the unemployment rate is consistently high?

7. 1. What is happening in the economy when the unemployment rate is low? › Sustainable economic growth › (GDP is positive & steady), › jobs are plentiful, 2. What is happening in the economy when the unemployment rate is rising? › Consumers are buying less products, › businesses produce less, › workers begin to be laid off › GDP begins to decline 3. What is happening in the economy when the unemployment rate is consistently high? › Businesses have slowed production & fired many workers › Jobs cannot be found › People without jobs do not spend or invest

8. 1. Ex: The economy is weak & John has seen his hours cut from 40 to 10. He is still employed but what is the problem with his employment scenario? 2. Ex: Lauren has her Master’s degree, but can only find work as a bartender in a coffee shop. She still has a job, but do her skills match her work? 3. John and Lauren are ________________ & are not counted in the __________________.

9. 1. Ex: The economy is weak & John has seen his hours cut from 40 to 10. He is still employed but what is the problem with his employment scenario? 2. Ex: Lauren has her Master’s degree, but can only find work as a bartender in a coffee shop. She still has a job, but do her skills match her work? 3. John and Lauren are underemployed & are not counted in the unemployment rate.

10. 1. Anna has been unsuccessfully seeking work for over a year, and she finally decided to give up. But, would she take a job if there was one to take? 2. Anna is d________________and not counted in the u_______________rate. 3. Not counting underemployed workers and discouraged workers causes the official unemployment scenario to appear l_______or ________ than the actual labor market conditions. 4. Why would the government not count these people in the UR? Explain the above cartoon.

11. 1. Anna has been unsuccessfully seeking work for over a year, and she finally decided to give up. But, would she take a job if there was one to take? 2. Anna is discouraged and not counted in the unemployment rate. 3. Not counting underemployed workers and discouraged workers causes the official unemployment scenario to appear lower or (better) than the actual labor market conditions. 4. Why would the government not count these people in the UR?

12.  Draw a simple graph of the relationship between unemployment rate & Real GDP.

13. Real GDP UR 0

14. Civilian Population236,832 Employed138,333 Unemployed14,837 Total Civilian Labor Force153,170 Not in the Labor Force83,663 Discouraged Workers (subset of those not in the labor force) 1,065 Calculate: 1.Labor force participation rate. 2.Unemployment rate. 3.Unemployment rate with discourages workers.

15. Civilian Population236,832 Employed138,333 Unemployed14,837 Total Civilian Labor Force153,170 Not in the Labor Force83,663 Discouraged Workers (subset of those not in the labor force) 1,065 Calculate: 1.Labor force participation rate. 153,170 / 236,832 = 64.7% 2.Unemployment rate. 14,837 / 153,170 = 9.7% 3.Unemployment rate with discouraged workers. (14,837 + 1,065) / 153,170 + 1,065) =10.3 %

16. Employment Scenario Truly Unemployed?Discouraged or Underemployed? Effect on the UR? Larry, a construction worker has been laid off and cannot find work so he quit looking Brian, a college professor, decides not to teach summer school Christy, a financial planner, was laid off and is currently looking for a job Kristin lost her job so she went back to graduate school because jobs are scarce

17. Employment Scenario Truly Unemployed?Discouraged or Underemployed? Effect on the UR? Larry, a construction worker has been laid off and cannot find work so he quit looking YESDiscouragedUR goes down Brian, a college professor, decides not to teach summer school NoneitherUR not affected Christy, a financial planner, was laid off and is currently looking for a job YESneitherUR goes up Kristin lost her job so she went back to graduate school because jobs are scarce YESDiscouragedUR goes down