Problem Set 5 1) What is the “rate of unemployment”, what components does it consists of, and how is it calculated? What happened to this rate in Australia during 1970-1983, and during 1992-2007? Give at least two reasons for the observed trends in each period. The rate of unemployment refers to the percentage of the labour force that is unemployed. The unemployment rate consists of the labour force and number of people actively seeking work whom are unemployed within the labour force.
On one hand, it’s simply a supply and demand issue. As wages rise, the demand for labor decreases. In other words, employers will simply stop, decrease, or slow down their hiring. Economists estimate that a ten percent increase in the minimum wage relative to the prices of goods and services decreases total employment of those affected by one or two percent. If the minimum wage increases too much, then it could even force some smaller firms out of business.
8% unemployed (as of September). Unemployed citizens fall into four different categories; cyclical, structural, frictional, and out of the work force. People who are out of the work force aren’t recorded for average income as they have left the labor force, and are not looking for employment anymore. However the main problem is people who unfortunately are accounted as cyclically unemployed. Cyclical unemployment occurs during a recession, as we have recently encountered.
According to Keynes, why might deflation create problems for an economy? ▪ In expectation of increased spending, too many entrepreneurs would begin businesses and most would fail. ▪ The cost of repricing goods would increase costs, and therefore reduce profits, for businesses and they would cut production. ▪ People would drop out of unions because unions would become ineffective at keeping wages of members high. ▪ Consumers might expect prices to fall further and cut back consumption now.
The administration cost of a separation includes the cost of the severance cost, exit interviews, unemployment hearings and other cost associated with turnover. The training and retraining of the employees is a huge cost to endure in such short periods of time. The indirect cost here include the excess of the overtime pay to current employees or monetary compensation to be paid to an outside source to use a temp service to take care of the work until a permanent employee is recruited and hired. This is paid in order to compensate to current employees in overtime or a temporary service to fill that void until the right person is found and located. The loss of production and or customers due to failure to deliver the employees or products you sell is also an indirect cost that affects the business in a negative way.
The dramatic economic downturn in the world economy that hurt so many workers starting in 2008 only accelerated a decades-long trend toward more precarious jobs and the unstable hours, low wages, minimal benefits and insecurity that this work means for so many, as led decline in union membership and activities. First is the emergence of an increasingly competitive business environment, in which firms have
Working conditions were harsh for the American industrial worker in the 1800s. With the boom of the Second Industrial Revolution and the need to expand business to meet consumer demands, employment opportunities opened at a rapid rate. In order to maximize profits, however, workers were given very few luxuries. Most factories had deplorable working conditions and were unsafe. Many workers lost hearing from loud machinery, lost limbs in hazardous equipment, and even lost their life due to the apathy of factory owners.
Because unemployment has straight effect on government spending, that new policies for taxes, reliefs and acts for job creation are set up. Firstly, Canon figures out the unemployment people’s living actuality, that purchasing power is decreasing, shortage of capital has impacts on the gross domestic product
Sitting at the top are those that have been unemployed for 15 weeks averaging about 8.5 million unemployed. Below them are those that have been unemployed 27 weeks and over averaging about 6.3 million unemployed. Why are there more unemployed at 15 weeks than 27 weeks? This may be the fact that people are finding jobs before they hit the 27 week mark. However, we may see a change in this if the economy stays as it is because all the people in that 15 week unemployment range are on their way to the 27 week unemployment range if a job cannot be found.
Yolanda Scott Business Economics GM 545 Spring 2013 YolandaAScott@Yahoo.com Exercise 1: Chapter 16 Question 5 Frictional unemployment is one type of unemployment and occurs when people move or change jobs. Individuals taking their first job tend to have higher than average rate of turnover. Settling into to a long-term job can be difficult. This type of unemployment is a choice on the part of the individual. Frictional unemployment is necessary to promote effective placement of workers to jobs.