Chapter 15 Unemployment How is Unemployment Measured employed worked as paid employees worked in their own business or worked as unpaid workers in a family member s business full time and part time workers those who were not working but who had jobs from which they were temporarily absent Unemployed who were not employed were available for work and had tried to find employment during the previous 4 weeks Not in the labor force those who fit neither of the first two categories such as a full time student homemaker or retiree labor force total number of workers employed and unemployed unemployment rate percentage of labor force that is unemployed labor force participation rate percentage of adult population that is in labor force natural rate of unemployment normal rate of unemployment around which unemployment rate fluctuates cyclical unemployment deviation of unemployment from its natural rate Does the unemployment Rate Measure What we Want it To discouraged workers individuals who would like to work but have given up looking for a job Most spells of unemployment are short and most unemployment observed at any given time is long term Frictional unemployment results because it takes time for workers to search for jobs that best suit their tastes skills Structural unemployment results because number of jobs available in some markets is insufficient to provide a job for everyone who wants one job search process by which workers find appropriate jobs given their tastes and skills unemployment insurance gov t program that partially protects workers incomes when they become unemployed Job Search Minimum Wage Laws If the wage is kept above the equilibrium level for any reason the result is unemployment Unions and Collective Bargaining union worker association that bargains with employers over wages benefits and working conditions collective bargaining process by which unions and firms agree on the terms of employment strike organized withdrawal of labor from a firm by a union unions are often thought to cause conflict between different groups of workers between the insiders who benefit from high union wages and the outsiders who do not get the union jobs State lawmakers sometimes debate right to work laws which give workers in a unionized firm the right to choose whether to join the union Theory of Efficiency Wages productive efficiency wages wages paid by firms to increase worker productivity 1 Worker Health Better paid workers eat a more nutritious diet and workers who eat a better diet are healthier and more 2 Worker Turnover a firm can reduce turnover among its workers by paying them a high wage 3 Worker Quality When a firm pays a high wage it attracts a better pool of workers to apply for its jobs 4 Worker Effort High wages make workers more eager to keep their jobs and worker harder
View Full Document
Unlocking...