1. Today’s Schedule – 10/30 Ch. 11 & 12.2 Quiz Finish Daily Show Clip
PPT:
13.1: Unemployment
13.4: Poverty
Activity: Life Happens
HW:
Cont. Read Ch. 13, Sections 1 & 4

2. Today’s Schedule – 10/31 Finish PPT: Activity: Life Happens HW:
13.1: Unemployment
13.4: Poverty
Activity: Life Happens
HW:
Read Ch. 13, Section 2

3. UNEMPLOYMENT

4. Types of Unemployment Frictional Unemployment Seasonal Unemployment
Structural Unemployment
Cyclical Unemployment

5. 1. Frictional Unemployment
When people take their time to find a job
Example: Changing jobs, taking time off to help family, taking time off after school
Unemployment pay can lessen the pressure to find a job

6. 2. Seasonal Unemployment
Unemployment that occurs as a result of harvest schedules, vacations, or industries that slow or shut down during certain seasons
Government does not intervene in this type of unemployment because it is seen as healthy
Example: Migrant farm workers, pool workers

7. 3. Structural Unemployment
When the structure of the economy changes, the skills of the workers needs to change as well
Think of the changes in the history of the U.S. market from agriculture to industrial to technological, etc.
When the structure changes, workers without the new skills will lose their jobs

8. 3. Structural Unemployment
Five causes of structural unemployment:
Development of new technology
Discovery of new resources
Changes in consumer demand
Globalization
Lack of education

9. 4. Cyclical Unemployment
Unemployment that rises during economic downturns and falls when the economy improves
During recession, demand for G &S drops  slowdown in production  drop in demand for labor  companies begin to layoff workers
Workers are typically rehired once the economy improves

10. 4. Cyclical Unemployment
The worst example of this was the Great Depression
1 out of 4 workers was unemployed
Government set up Social Security and Unemployment Pay as a result

11. Measuring Employment
Each month the BLS polls 50,000 random families about their employment for the month
From these polls they calculate the unemployment rate (percentage of the nation’s labor force that is unemployed)

12. Full Employment
Means that everyone who wants a job has a job- is this possible?
Does not mean they are happy/satisfied with their job
Underemployment: working at a job for which you are overqualified or working part time when you want to work full time

13. Discouraged Workers People who have stopped searching for a job
Rely on family or savings to support themselves
These people are not calculated into the unemployment rate by the BLS- why not?

14. POVERTY

15. Who Are We Talking About?
Family: A group of two or more people related by birth, marriage or adoption who live in the same housing unit
Household: All people who live in the same housing unit regardless of how they are related

16. Poverty Threshold
Poor Family: When a family’s income is less than the amount needed to meet minimum needs
Poverty Threshold: The income level below which income is insufficient to support a family or household
This varies based on the size of a family

17. Poverty Threshold Examples
Single parent under 65 with one kid = $12,490 Family of 4 including 2 kids = $18,850

18. Poverty Rate
Percentage of people who live in household with income below the official poverty threshold
Poverty indicators:
Race and ethnicity
Type of family
Age
Residence

19. Race and Ethnicity
The poverty rate among African Americans and Hispanics is more than twice the rate for white Americans

20. Type of Family
Families with a single mother have a poverty rate almost six (6) times greater than that of two parent families
One persons incomes vs. having two incomes

21. Age
Children make up the greatest percentage of those living in poverty followed by young adults (that means people YOUR age!)

22. Residence
People living in the inner city have double the poverty rate of those who live outside the inner city
Why would this be the case?
Where are the jobs?
People who live in rural areas have higher poverty rate

23. Causes of Poverty
A family is poor when the adults fail to earn enough income to support the family’s basic needs
Often due to unemployment
1 million Americans are unemployed
Chronic health problems
However, more than half of poor families have one person who works at least part time and 1 in 5 work full time

24. Causes of Poverty Lack of Education Location
Racial/Gender Discrimination
Economic Shifts
Shifts in Family Structure

25. Lack of Education
Someone who is a high school drop out on average earns $18,344- just barely above the poverty threshold for a family of four (4)

26. Location
People who live in the inner city earn less than those living in the suburb
Same for people living in rural communities

27. Racial and Gender Discrimination
White workers earn more than minority workers
Men earn more than women
Often due to differing hours worked, education and work experience
This type of discrimination has been decreasing in recent years

28. Economic Shifts
Those with less education are often the first to be laid off when the economy is poor
Outsourcing of jobs often most effects those with limited education as those types of jobs are typically manufacturing based

29. Shifts in Family Structure
Divorce rate has been on the rise since the 1960s
Number of children born to unmarried parents has also been on the rise
These type of family structures tend to have higher poverty rates

30. Income Distribution
How the nation’s total income is distributed among its population
Average income is $43,318
Half the population is above this
Half the population is below this

31. Income Inequality
We have one of the highest GDP rates, yet millions of people living below the poverty threshold
How is this possible?
Have to look at how the income is distributed
Highest 1/5 of the population receives 49.8% of all income in the United States
Lowest 1/5 of the population receives 3.4% of all income in the U.S.

32. Income Gap Why is there a difference in what people earn?
Differences in skills and education
Inheritances (receiving money and earned money through investments)
Type of work
High demand  low supply = high wages

33. Poverty Assistance Enterprise Zones Employment Assistance
Welfare Reform

34. Enterprise Zones
Areas where businesses can locate without having to pay taxes

35. Employment Assistance
Job training programs to help workers gain skills needed to get jobs; minimum wage salaries

36. Welfare Reform
System that provides basic needs, especially for children and the elderly
Often receives criticism that it encourages the poor to stay unemployed
New legislation requires a move from welfare to workfare (requiring work to receive aid)