Wednesday, August 10, 2016

econ.- employment (notes)

4 types of unemployment:
  1. frictional: when people take time to find a job, change of jobs
  2. seasonal: result of harvest schedule, vacations, or industries slow/shut down for a season
  3. structural: when workers' skills don't match jobs available- technology > people
  4. cyclical: rises during economic downturns & falls when economy improves
unemployment rate: % of labor force LOOKING for jobs but don't have one

full employment: level of employment reached when there is no cyclical unemployment

underemployment: working at a job where one is overqualified or working part time when full time is desired

discouraged worker: person who wants a job but has given up looking

consumer price index: determined by measuring price of standard group of goods meant to represent "market basket" of typical urban consumers

inflation: general increase in prices

3 causes of inflation: 
  1. quantity theory: too much money in the economy
  2. demand-pull: occurs when demand for goods exceeds existing supplies
  3. cost-push: occurs when producers raise prices to meet increased costs
poverty threshold: income level below which income is insufficient to support family or household

5 causes of poverty: 
  1. lack of education: high school dropouts can earn just above poverty line
  2. location: racial minorities in inner city earn less
  3. racial: whites earn more
  4. gender discrimination: men earn more
  5. economic shifts: people who lack education hired when economy is expanding & workers are hard to find--> lose jobs when economy slows down. decline in manufacturing, rise of technology 
income distribution: how nation's total income is distributed among population

income inequality: poor & rich
Lorenz curve: area between line of equality & curve = amount of inequality

income gap: gap between poor & rich due to differences in skills & education, inheritances

how to measure unemployed who are included in the unemployment rate: look at the 4 types of unemployment & count number of people who are looking for a job but don't have one

3 effects inflation can have: 
  1. increase in real estate prices
  2. raised wages, price of goods
  3. services increase
who does it hurt & help?
hurts: buyers
helps: sellers & workers

4 socioeconomic groups more affected by poverty:
  1. race & ethnic origin: poverty rate among African Americans & Hispanics = more than 2x Whites
  2. type of family: single moms = poverty rate 6x more than 2 parent families
  3. age: % of children in poverty > other age group
  4. residence: people live in inner city 2x more than those living outside inner city 
3 anti-poverty policies:
  1. enterprise zones: area where companies can locate free of certain local/state/federal taxes & restrictions
  2. employment assistance: job training programs for workers w/o skills, minimum wage
  3. welfare reform: provides for basic needs. block grants (federal funds given to states) = states responsible for programs. workfare = programs requiring work in exchange for temporary assistance

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