Scot Wick Blog

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 9 The Real Economy in the Long Run Chapter 28 of 36 Unemployment Section 11 of 21 … Frictional Unemployment — continued. Unemployment insurance is a government program designed to give workers partial protection against job loss. However, unemployment insurance increases the amount of frictional unemployment. ... Those not eligible for unemployment insurance are typically those who · quit their jobs · were fired for cause · recently entered the labor force Unemployment insurance benefits are paid only to the unemployed who were laid off because their previous employers decided they were no longer needed, typically because of reduced demand for products or increased production efficiencies. The terms of unemployment insurance programs vary over time and across states. Typically, a worker covered by unemployment insurance in the United States receives 50% of their former wages for 26 weeks. Unemployment i...

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 9 The Real Economy in the Long Run Chapter 28 of 36 Unemployment Section 10 of 21 … Here we discuss four explanations for long-run unemployment -1- frictional unemployment -2- minimum wage laws -3 - unions and collective bargaining -4- efficiency wages … -1- Frictional Unemployment, continued Although some frictional unemployment is inevitable, the amount is not. The faster information spreads about worker availability and job openings, the faster the economy can match workers and firms. Government public policy may play a role. If policy can reduce the time taken for unemployed workers to find new jobs the economy's natural rate of unemployment can be reduced. Government programs try to facilitate job search in various ways including through government-run employment agencies and public training programs. ... Advocates of these programs believe they · make the economy operate more efficiently by keepin...

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 9 The Real Economy in the Long Run Chapter 28 of 36 Unemployment Section 9 of 21 … Here we discuss four explanations for long-run unemployment -1- frictional unemployment -2- minimum wage laws -3 - unions and collective bargaining -4- efficiency wages … -1- Frictional Unemployment This is unemployment that results because it takes time for workers to search for and obtain jobs. Job search is the process of matching workers and appropriate jobs and is a reason there is always some unemployment. In the job market · workers have different tastes and skills · jobs have different attributes · information about job candidates and job opportunities is disseminated slowly ... Frictional unemployment often results from changes in demand for labor among firms. When consumers decide they prefer Apple to Dell computers Dell lays off workers and Apple hires workers. Former Dell workers must search for new jobs. Appl...

  Capitalism Does Not Exploit Workers, Rather Government Does First, watch this six-minute video: “Does Capitalism Exploit Workers?” https://www.youtube.com/watch?v=4Ttbj6LAu0A From notes under video: The idea capitalism exploits workers stems from Karl Marx's work in the late 1800s. Although the definition of "exploitation" has changed since then, many still believe capitalist systems take advantage of vulnerable workers. Professor Matt Zwolinski in the video explains why capitalism actually tends to protect workers' interests. … Zwolinski contends even if capitalism was exploitative, increasing political regulation and control would actually make the problem worse. Increases in government size and power make citizens more vulnerable to the state. Political officials are tempted to exploit this vulnerability for the benefit of the politically well-connected. … Unlike free market transactions, which are mutually beneficial, when politics is involved one party's ga...

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 9 The Real Economy in the Long Run Chapter 28 of 36 Unemployment Section 8 of 21 ... Why do economies experience unemployment? In most markets prices adjust to bring quantity supplied and quantity demanded into balance, so there is no surplus nor shortage of supply. In the labor market the surplus of supply is unemployed people. In an ideal labor market, wages would adjust to balance the quantity of labor supplied and the quantity of labor demanded. This wage adjustment would ensure all workers are always employed. Even when the overall economy is strong there are always some unemployed workers, the unemployment rate never drops to zero. Rather, it fluctuates around the natural rate of unemployment, per Figure 2a. ... We will discuss four explanations for long-run unemployment: -1- frictional unemployment -2- minimum wage laws -3 - unions and collective bargaining -4- efficiency wages Frictional unemplo...

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 9 The Real Economy in the Long Run Chapter 28 of 36 Unemployment Section 7 of 21 … Measuring the economy’s unemployment is not a straightforward task. For example · it is easy to distinguish between a person with a full-time job and a person who is not working at all · it is not easy to distinguish between an unemployed person and a person not in the labor force ... People commonly move into and out of the labor force. More than a third of the unemployed are recent labor force entrants. These recent entrants include · young workers looking for first jobs, e.g. recent college graduates · older workers who left the labor force previously but have now returned to look for work Not all unemployment ends with the job seeker finding a job. Almost half of unemployment periods end when the unemployed person leaves the labor force. ... Because people often move into and out of the labor force, unemployment stati...

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 9 The Real Economy in the Long Run Chapter 28 of 36 Unemployment Section 5 of 21 … Figure 3 – Labor Force Participation Rates This shows the percentage of adult men and women in the U.S. labor force. In recent decades the percentage for women has gone up and for men has gone down. (Figure 3a includes recent years data). … Women's role in American society and economy has greatly changed over the past century. Commentators have identified many causes for this change, including · new technologies, such as the washing machine, clothes dryer and dishwasher, which have reduced the time required for household tasks · improved birth control, reducing the number of children in the family · changing political and social attitudes, which have been affected by the advances in technology and birth control ... Figure 3 shows labor-force participation rates of men and women in the U.S. since 1950. In the early 1950s o...