Please enable JavaScript.
Coggle requires JavaScript to display documents.
30.1 Employment and Unemployment - Coggle Diagram
30.1 Employment and Unemployment
Changes in Unenmployment
During periods of rapid economic growth → ↓U-rate usually; during recessions or periods of slow growth → ↑U-rate usually
Basic Information:
over many years; ↑in labor force are more or less matched by ↑E; B/C if ↑E – 15 and over, willing and able to work, who have ANY job –, then people in labor force naturally increases
over short term; U fluctuates considerably b/c Δ in labor force are
not
matched by changes in E; B/C if U – 15 and over, willing and able to work, who have no job – goes higher (less people working) that changes labor force but doesn't relate to employment b/c unemployment rate relies
only
on unemployment and labor force; ≠ employment
Changes in Employment
employment = demand + supply of labor
; how are the two "sides" of the Canadian labor market changing?
supply side → labor force has grown virtually every year since end of WWII
rising population;
boosts entry into labor force of people born 15-25 years previously
increased labor force participation by various groups
, especially women
net immigration of working-age persons
DEFINITION SUPPLY OF LABOR
: the amount of labour, measured in person-hours, offered for hire during a given time-period.
demand side → many existing jobs are eliminated every year, and many new jobs are created
technological imporvements → ↑Y → disrupts economy; some sectors thrive (creating new jobs) while others decline (jobs are lost)
even in normal industries, jobs are lost and new ones are created
LR
: growth in labor force is matched by growth in employment
SR
: fluctuations in the unemployment rate
the net increase in employment
=
difference b/w all the jobs that are created and all those that are lost
**enough new jobs are created both to offset the number of jobs that have been eliminated and also to provide jobs for the growing labor force
Consequences of Unemployment
Lost Output
unemployed individuals are valuable resources who are currently not producing output
→ output not produced, but potentially could be, is loss of income for society; once person is employed, output rises → loss ceases to occur
HOWEVER, nothing makes up for past los that existed while person was unemployed; such loss is lost forever → represents serious waste of resources
Personal Costs
generally Canadian and American worker aren't in long-term unemployment; recovery part of recession would allow for u-rate to not be as high as it could be w/o it
HOWEVER, when individuals become disillusioned – giving up trying to find work – and contribute to social unrest, becomes serious social problem;
loss of self-esteem and dislocation of families that result from unemployment are genuine personal and family tradegies
Measurement Problems
the official labor market understate the full effects of recessions on unemployment
u-rate = individuals who are NOT currently working and who ARE actively searching for a job
discouraged workers
(individuals unable to find a job who stop "actively seeking work", usually seen during recessions) aren't included in labor force and are not considered unemployed EVEN THOUGH they would still accept a job if one were offered to them; labor-market data largely understates amount of "true" unemployment present...
measure of unemployment fails to take account of situations where an individual is
underemployed
someone who has lost their job will take a part-time job or a low-paying job instead of being unemployed; these workers are represented as employed EVEN THOUGH they are searching for jobs better suited to their experience and qualifications
Flows in the Labor Market
labor market is better described by flows in/out of unemployment, rather than U-rate
public and media tends to focus on employment/u-rate HOWEVER doing so hides actual Δ in labor market → Δ in employment & unemployment (usually determined by
net
flows)
forget that in labor market Δ include
job creation
and
job destruction