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

Today’s Schedule – 10/31

• Finish PPT:– 13.1: Unemployment– 13.4: Poverty

• Activity: Life Happens• HW:– Read Ch. 13, Section 2

UNEMPLOYMENT

Types of Unemployment

1. Frictional Unemployment2. Seasonal Unemployment3. Structural Unemployment4. Cyclical Unemployment

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

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

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

3. Structural Unemployment

• Five causes of structural unemployment:1. Development of new technology2. Discovery of new resources3. Changes in consumer demand4. Globalization5. Lack of education

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

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

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)

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

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?

POVERTY

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

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

Poverty Threshold Examples

Single parent under 65 with one kid = $12,490

Family of 4 including 2 kids = $18,850

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

Race and Ethnicity

• The poverty rate among African Americans and Hispanics is more than twice the rate for white Americans

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

Age

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

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

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

Causes of Poverty

1. Lack of Education2. Location3. Racial/Gender Discrimination4. Economic Shifts5. Shifts in Family Structure

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)

Location

• People who live in the inner city earn less than those living in the suburb–Same for people living in rural

communities

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

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

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

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

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.

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

Poverty Assistance

1. Enterprise Zones2. Employment Assistance3. Welfare Reform

Enterprise Zones

• Areas where businesses can locate without having to pay taxes

Employment Assistance

• Job training programs to help workers gain skills needed to get jobs; minimum wage salaries

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)