13.

1 10/05/2007 11:37:00
Types of Unemployment
• Four types
o Frictional- in between jobs Ex: college grad. Looking.
o Structural- your labor skills are no longer in demand. EX:
ATM, self-checkout
o Seasonal- Ex: lifeguard
o Cyclical- unemployment b/c economy is in bad shape EX:
depression and recessions
• Full employment- no cyclical unemployment
o Unemployment Rate- only applies for people that are actively
looking for a job
o Doesn’t count discouraged workers
o Underemployed- overqualified EX: lawyer bagging grocery
• Unemployment rate
o Number of unemployed
 number in labor force
 actively looking
Chapter 13 10/05/2007 11:37:00
An increase in the overall price level (avg prices) is called inflation. A
decrease is called deflation.
10/05/2007 11:37:00
ch 13 10/05/2007 11:37:00
The poverty rate of families with no workers and headed by a female is the
highest.
• Young, single motherhood = most poverty
• Many times mom drops out of school= redues possibility of future
earnings
• Most go on welfare b/c of lack of edu. And litd. Job skills.
•
• Poverty rates are highest in south
• These states have the highest rate of births to single moms
•
• government tries to help- only designed to help poor, so welfare
benefits decrease as income from other sources increases
• when more earnings are made, cash benefits like housing
assistance, food stamps, WIC are cut out.
• For every dollar of income earned, one dollar of benefits are cut (if
you make money you loose government money)
• This is sometimes bad, because it reduces the incentive to work-
working may actually reduce your income- this can be frustrating to
those trying to work way off welfare.
Cycle of Poverty
• Welfare children may end up on welfare themselves when parents
were on welfare
• Learn that welfare can take care of them and it’s a way of life, not
temporary help.
Welfare Reform
• Concern for the cycle of poverty has lead to recent reform
• Lifetime limit of fiver years per recipient