Chapter 10 - Unemployment
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30 terms
Terms | Definitions |
|---|---|
 Bureau of Labor Statistics | - produces data on unemployment, length of the avg workweek, and duration of unemployment every month (survey of 60,000 households) |
| Employed | work as paid employees, in own business, unpaid worker in family business (part time full time, were not working but had jobs that they were temporarily absent from) |
| Unemployed | those who were not employed, were available for work, and had tried to find employment during the previous 4 week |
| Not in labor force | full time student, homemaker, or retired |
| Labor force | total number of workers |
| Labor force = | number employed + number unemployed |
| Unemployment rate = | # of unemployed/labor force |
| Labor force participation rate = | labor force/adult population |
| Natural rate of unemployment | the normal rate of unemployment around which the unemployment rate fluctuates |
| Cyclical unemployment | the deviation of unemployment from its natural rate |
| Does unemployment rate measure what we want it to? | hard to distinguish b/w a person who is unemployed and a person not in the labor force, more than 1/3 of unemployed are recent entrants into the labor force, almost 50% leave labor force because they cannot find employment |
| Unemployment statistics difficult to prove: | unemployed may not be trying hard to get a job, calling themselves unemployed to qualify for government programs, working but paid "under the table" to avoid taxes |
| Discouraged workers | individuals who would like work but have given up on looking for a job |
| Ideal labor market | wages would adjust to balance the quantity of labor supplied and demanded |
| Frictional unemployment | results because it takes time for workers to search for the jobs that are best suited for them |
| Structural unemployment | when a quantity of labor supplied exceeds quantity of labor demanded (often thought to explain longer spells of unemployment) |
| Job search | the process by which workers find appropriate jobs given their tastes and skills |
| Sectoral shifts | changes in the composition of demand among industries or regions |
| Unemployment insurance | a government program that partially protects workers' incomes when they become unemployed (increases frictional unemployment, 50% of former wages for 26 weeks) |
| Minimum wage laws | surplus of labor because minimum wage is greater that equilibrium |
| Unions | worker associations that bargain with employers over wages, benefits, and working conditions (wages are not determined by equilibrium) |
| Collective bargaining | the process by which unions and firms agree on the terms of employment |
| Strike | an organized withdrawal of labor from a firm by a union (reduced production, sales, and profit) |
| Wagner Act of 1935 | prevents employers from interferring in unions and bargain with unions in good faith |
| NLRB | enforces workers right to unionize |
| Efficiency wages | above equilibrium wages paid by firms to increase worker productivity |
| Worker health | better paid workers eat a more nutritious diet, making them healthier and more productive |
| Worker turnover | the more a firm pays its workers, the less often they will choose the leave, reducing turnover |
| Worker quality | when a firm pays a high wage, it attracts a better pool of workers to apply for its jobs and increases the quality of workforce |
| Worker effort | higher wages make workers more eager to keep their jobs and thereby give workers an incentive to put forward their best effort |
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