To what extent is unemployment rate an accurate measure of the standard of living? EQ 4-3

Unemployment rate The unemployment rate is used to measure the overall health of the economy. In general a high unemployment rate indicates an unhealthy economy. The BLS will conduct a random survey to determine the unemployment rate. The are 3 classifications of people in the country. 1.Employed- members of the labor force who have jobs. 2.Unemployed- members of the labor force who don’t have jobs but are looking for work 3.Not in the labor force- those who are eligible to be in the labor force but don’t have jobs and are not looking for jobs. This includes: those who have stopped looking full time students, disabled retired those prevented by family responsibilities.

Unemployment rate does not take into consideration two important groups of people: 1. Discouraged workers or in other words those who have given up looking for work. Some say that if we counted these people in the unemployment calculations the our real unemployment rate is 17%. 2. Involuntary part-time workers are not counted as part of the unemployment rate. These are the people who would like full time jobs but can only get part- time hours. They are partially employed.

Unemployment rate Based on the data below and using the equation provided calculate the unemployment rate for October 208 U.S. Unemployment rate October 2008 Adult population (234.4 million) Unemployment rate = ______________________ x 100 = 9.5 million million 6.1% Employed (145.3 million ) Unemployed (9.5 million)Not in labor force (79.6 million) TC

Economic cost of Unemployment 1.Lost of potential output. 2.Loss of income by workers 3.The unemployed do not contribute to taxes and in fact usually collect unemployment insurance 4.If the number of unemployed becomes too large, money from other programs must be shifted to unemployment programs or taxes are raised on those who have jobs. June 2013 unemployment is 7.6% Our employment rate is about 3.0% higher Cyclical unemployment is what we need to concern ourselves with. But employment for the sake of employment and not for production could cause a problem. Production (GDP) and unemployment have an inverse relationship.

To what extent is unemployment rate an accurate measure of the standard of living? EQ 4-3

What is the proper role of government in dealing with unemployment? EQ 4-8

To what extent can the statement, “nothing without cost” be applied to government policies dealing with unemployment? EQ 4-10

Here is my job plan in 2008 Hire all unemployed people The government pay each person $60,000 to dig holes and fill them back in. 2008, there were 9.5 million unemployed – the total cost of my job plan would be $570 billion. The stimulus package in 2009 was $803.1 Billion. My plan is roughly 70% of the cost and brings unemployment down to zero. The extra 30% could be used to pay for capital or discouraged workers Would you vote for my plan? Why or Why not? Don’t fall into the TRAP!!!!!!!

Would you pay someone to dig holes and fill them back in? Why not? Watch out for “digging holes”

Paint ’em white

President Obama on Jobs Romney on Jobs

If you break it down there are three main interpretations of the government’s role in terms of job creation. 1.They can “find” you a job. 2.They can create jobs 3.They can pass laws that create an environment for the free market to create jobs.

Directions: Your responsibility is to create a “Jobs plan” you must choose 3 of the 17 options provided. First, review the 17 options provided and their short descriptions. If you need more information you may ask the teacher or access the internet via your Iphone. Next, assess all 17 option using the words- Top, OK, or Undesirable. These words are intended to give you the opportunity to quickly assess the options without splitting hairs. Some debate and discussion between group members will be in order. You are entitled to your personal ideas but the group must make a decision. When ranking you should consider the rationale and the trade-off but you do not need to write these ideas down on the paper. Now, choose your top 3 options. For the three options please fill out the rationale and the benefits and the costs. (Brainstorm and make educated assumptions) Finally, each member of the group needs to write a short paragraph that describes their plan and the associated costs and benefits. Will go up to the board write down the numbers of the plan.

To pass the option a super majority of the group must agree. (4/5) Note: this cannot prevent the assignment from being completed. Other factors to consider... Can the policy be accomplished by the free market. If so, then why isn’t it occurring? Also Is the policy an example of the government finding jobs? Creating jobs? Or creating an environment for the free market to create jobs?

Assess Solution DescriptionRationale Benefits Costs Extend unemployment benefits Cut income tax Cut payroll tax For employer Increase government spending Increase money supply Fund education, skills development, and technology Government vote to extend payments to those unemployed People take home more money and give less to the government Employers pay less taxes on the salaries of their employees Increase the G spending in GDP to boost aggregate demand More money for people and government to borrow Loans to people to increase education and the skills of the workforce

Assess Solution Description Rationale Benefits Costs Fund Reduced pay programs Develop government work programs To create jobs Restrict legal immigration Reduce capital gains tax Tax credit for employers who hire long- term unemployed workers Subsidies to companies that hire unemployed youth Encourage businesses to cut hours of employees and to hire more people. Reimburse the employees for their lose wages The government can programs to produce goods and services as opposed to hiring private firms Cut the number of available workers, leaving more work for citizens already living in the United States Cut the tax on people who make money on their stocks. Intended to promote more investment and encourage growth of businesses. Cut taxes or provide a subsidy to employers who hire workers for long term positions as opposed to temporary jobs Intended to incentivize companies to hire teenagers

Assess Solution Description RationaleBenefits Costs Create laws to prohibit employers from discriminating against the unemployed Don’t do anything allow the free market to operate Create policy that promotes GDP growth Bailouts Increase laws, investigations, and penalties for those who discriminate against those who are unemployed. Let markets operate freely and they will allocate resources to their most useful place. This includes labor. Remove restrictions and regulations that prevent firms from producing. An increase in production will lead to an increase in the need for labor. Provide failing firms with bailouts in order to prevent closings and in order to protect jobs. Insourcing Subsidize firms that keep jobs in our nation and taxes companies that outsource the jobs Other ideas

Should the government “save” jobs? Should the government “bring jobs back”? Are we “losing” jobs to the rest of the world?

What is the proper role of government in dealing with unemployment? EQ 4-8 Should all jobs be saved?

To what extent can the statement, “nothing without cost” be applied to government policies dealing with unemployment? EQ 4-10