Indicators and measurement for performance Gene Chang

Economic stability Job opportunities: measured by the unemployment rate Stable prices: measured by the inflation rate Major indicators

Employment and job opportunities How to measure unemployment rate Number of unemployed / labor force Labor force = # of unemployed + # of employed Definition of unemployed Definition of employed

Employment and job opportunities “discouraged workers” Under estimate the severity of unemployment in the economic recession Unemployment 6

Employment and job opportunities The unemployment number that is most often used in the media (and by the government) is known as the "U-3". The "U-6" is considered to be a broader measure of the unemployment situation in the United States. The "U-6" includes two groups of people that the "U-3" does not: "Marginally attached workers" - people who are not actively looking for work, but who have indicated that they want a job and have looked for work (without success) sometime in the past 12 months. This class also includes "discouraged workers" who have completely given up on finding a job because they feel that they just won't find one. People who are looking for full-time work but have to settle on a part-time job due to economic reasons. This means that they want full-time work, but can't find it. The "official" unemployment number is the "U-3" - this was 8.1% in February. The "U-6" was an eye-opening 14.8% in February.

Employment and job opportunities

The inherent instability of a free market system. Creating the business cycle of an economy The Keynesian solution Government intervention “Mixed economy”

Unemployment rate in the recent U.S. history

The growth rate of U.S. real GDP since

Unemployment by country Data from the Excel table: List of unemployment rates by countries Least Developed countries The U.S. and Hong Kong Western European welfare states Countries with different labor laws Central Planned economies

Least developed countries Surplus labor Lewis theory: unlimited labor supply Huge unemployed in urban areas, but many worked in the urban informal sector Huge under employed in rural areas

The U.S. and Hong Kong Developed countries with liberal labor laws Low unemployment rate But job switch by employees is common and often.

Western European countries Most Western European countries and Canada Welfare state Generous unemployment compensation

Countries by different labor laws French model: Dismissal by good causes – –France, Sweden – –Many Southern American countries The U.S. model: at Will – –Hong Kong – –Denmark

Unemployment by country The Japanese model – –Japan Taiwan South Korea

Centrally Planned Economies Lower unemployment The state guarantees jobs for everybody Surplus labor within the factories, 30-80% of workers could be redundant in the firms Underemployment and disguised unemployment

Migrant workers in LDCs in informal sectors Taking part time jobs “floating population” Case in China: A peasant worker in Beijing – /28500.htm