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Unemployment

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Unemployment Unemployment Presentation Transcript

  • . Inflation “ Too much money” Real GDP Real GDP Unemployment Business Cycles Unemployment
  • UNEMPLOYMENT Measurement of Unemployment, 2004 Total Population 293,400,000 Labor force 146,800,000 84,200,000 76,000,000 8,200,000 138,600,000 Employed Not in labor force Under 16 and/or institutionalized Unemployed
  • Dollar Figures From Different Times Babe Ruth made $80,000 in 1931. That would be equivalent to $1 million today. [B arry Bonds gets $18 million a year] P resident Herbert H oover’s salary in 1931 was $ 75,000 . That would be equivalent to $900,000 today. George Bush is being paid $400,000 a year. Who is the Richest American Ever? John D. Rockefeller’s [1839-1937] wealth would be worth $200 billion in today’s money, or 4 times that of Bill Gates. Although Rockefeller was worth $200 billion, he could not watch TV, play video games, surf the internet, or send email to his grandkids. For most of his life, he could not use AC, travel by car or plane, use a telephone to call friends, or take advantage of antibiotics to prolong & enhance life. Perhaps the average American today is richer than the richest American a century ago. $ 80, 000= $ 1 M
  •  
  • 1920 2002 Watchmakers 100,000 5,000 Professional jocks 5,000 80,000 Railroad employees 2 mil [1910] 215,000 Blacksmiths 238, 000 [1910] 5,000 Farm workers 12 M [1910] 851,000 Engineers 38,000 [1900] 2 mil. A uto M echanics 0 in 1900 1 mil. C omputer programmers 5,000 [1960] 2 mil. Creative Destruction
  • Three Types of Unemployment Frictional – “temporary”, “transitional”, “short-term.” (“between jobs” or “search” unemployment )
    • Examples:
    • People who get “fired” or “quit”
    • to look for a better one.
    • 2. “Graduates” from high school or
    • college who are looking for a job.
    • 3. “Seasonal” or weather-dependent jobs such as
    • “ agricultural”, “construction”, “retail”, or “tourism.”
    • [lifeguards, resort workers, Santas, & migrant workers.]
    • Frictional unemployment signals that “new jobs” are available
    • and reflects “freedom of choice”.
    • These are qualified workers “transferable” skills.
  • 2. Structural Unemployment Structural – Skills do not match current jobs. There are basic changes in the “structure” of the labor force which make certain “skills obsolete” . Automation may result in job losses. Consumer taste may make a good “obsolete”. The auto reduced the need for carriage makers . Farm machinery reduced the need for farm laborers. “ Creative destruction” means as jobs are created, other jobs are lost. Jobs of the future destroy jobs of today. Frictional and Structural make up the “natural rate of unemployment” . “ These jobs do not come back.” “ Non-transferable skills” – choice is prolonged unemployment or retraining.
  • 3. C yclical U nemployment Cyclical – “ economic downturns” in the business cycle . “ Cyclical unemployment” is “real unemployment”. “ These jobs do come back.”
  • RECENT DATA: Current Unemployment Rate: 4.6%
  • Top Paying College Majors for 2006
  • Average Annual Earnings in 2004
    • Lifetime
    • Education Level Ages 25-34 35-44 45-54 55-64 Earnings
    • Less than 9 th grade $21,000 23,945 25,167 26,685 976,350
    • High School dropout 25,316 29,177 29,779 30,798 1,150,698
    • High school graduate 31,565 36,922 38,235 38,802 1,455,253
    • Some college, no degree 35,816 43,469 46,140 47,158 1,725,822
    • Associate’s degree 38,512 45,594 48,253 47,778 1,801,373
    • Bachelor’s degree 51,645 67,471 68,509 69,092 2,567,174
    • Master’s degree 60,738 77,622 77,676 80,271 2,963,076
    • Doctorate 71,903 110,564 101,110 101,110 3,982,577
    • Professional degree 83,823 139,597 147,777 154,222 5,254,193
    • Equally weighted average $46,795 $63,818 $64,739 $67,721
  • Hot & Cold Jobs 2005-2015
  • Unemployment Falls from 6.4% to 6.2% Because the Labor Force Shrinks by 556,000 July, 2003 9 million were unemployed in July, compared to 9.4 million in June.
      • 1900 1960 2004
    • Farmers 5,674,000 Retail Sales 4,352,000 Retail Sales 6,200,000
    • Agricultural lab 4,411,000 Farmers 2,526,000 Teachers 4,029,000
    • General laborers 2,578,000 Teachers 1,684,000 Secretaries 3,791,000
    • Servants 1,454,000 Truc/trac driv.1,663,000 Truck drivers 2,666,000
    • Merchants 791,000 Secretaries 1,493,000 Farmers 2,368,000
    • Clerks 630,000 HH workers 1,282,000 Janitors 2,126,000
    • Salespeople 611,000 Farm laborers 1,244,276 Bookkeepers 1.912,000
    • Carpenters 600,000 Manu laborers 961,000 Engineers 1,846,000
    • RR workers 582,000 Bookkeepers 936,000 Cooks 1,779,000
    • Miners 563,000 Carpenters 924,000 Mechanics 2,000 000
    • Teamst/coachmen 539,000 Wait/Wait resses 896,273 Nurses 1,712,000
    • Teachers 439,000 Engineers 872,000 Freight h andler 1,688,000
    • Launderers 386,000 Mechanics 862,000 Police 1,669,000
    • Dressmakers 347,000 Textile workers 808,000 Financial sales 1,612,000
    • Iron/Steel Workers 346,884 Construction 751,000 Commod. brok 1,601,000
    • Machinists 283,000 Assemblers 687,000 Nursing aides 1,506,000
    • Painters 278,000 Janitors 621,000 Accountants 1,446,000
    • Bookkeepers 255,000 Stichers 617,000 Health Techs 1,379,000
    • Cotton Mill Workers246,391 Cooks 597,000 Wait/Wait resses 1,355,000
    • Tailors 230,000 Typists 544,000 Com Pro/Oper 1,400,000
    • Blacksmiths 227,000 Machinists 516,000 Carpenters 1,277,000
    • Firefighters 223,000 Inspectors 514,000 Precis.Product 1,227,000
    • Shoemakers 209,000 Policemen 513,000 Assemblers 1,119,000
    • Sawyers 161,624 Cashiers 492,000 Equip. Op erators 1,022,000
    • Masons 161,000 Packers/Wrap. 492,000 Child Care Work 972,000
    • Housekeepers 155,000 Accountants 477,000 Eng. Technol. 947,000
    • Printers 155,000 Deliverymen 438,000 Computer Scien. 923,000
    • Seamstresses 152,000 Painters 416,000 Postal & Mail 923,000
    • Physicians 132,000 Launderers 412,000 Groundskeepers 890,000
    • Tobacco workers 132,000 Hosp, Attendants 408,587 Professors 800,000
  • Unemployment 1900-1990
  • Unemployment Report for 2004 There were 1,000 created but 309,000 dropped out so unemployment looked better (5.9% to 5.7% but it really wasn’t) Recession
  • Unemployment by Race, Sex, Age, and Education at 7.4%
  • Who Were the Unemployed in 2000 when Unemployment was 4 %? Unemployment Rates vary . . . White Black Hispanic White Black Hispanic White Black Hispanic National average High school dropouts High school graduates College dropouts College graduates Master's degree Doctoral degree 3.2 3.7 5.9 3.5 5.4 5.3 16.7 11.4 Adult Males Adult Females Teenagers 24.7 4.0 6.4 3.5 2.7 1.8 1.6 0.9 40 36 32 28 24 20 16 12 8 4 0 . . . by race, sex, age . . . by education
  • The More You Learn, The More You Earn 1998 Overall Unemployment Rate = 4.4% [Unemployment Rate & Median Earnings by Education] 8% 7% 6% 5% 4% 3% 2% 1% 0 4.1% $ 28K High School Grad 3.2% $ 31K Some College Grad Unemployment Rate - 1998 Mediun Earnings 2.5% $33K Associates Degree 1.9% $ 51K C ollege $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 0 1.6% $60K Master’s 1.3% $75K Advanced Degree 7.1% $19K Less Than High S choo l D iploma