Wages, Unemployment, and Poverty

Econ

Who is included in the Labor Force?

• citizens ages 16 or older

• unemployed (actively looking for a job) & employed

Who is NOT included in the Labor Force?

• military personnel

• people in school

• prisoners

• no job / not actively looking

What is Unemployment?

no job, but ACTIVELY looking

How do we calculate the unemployment rate (who counts)?

percentage of employed vs. unemployed

Who does NOT count in the calculation of the unemployment rate?

• discouraged workers

• underemployed

The four types of unemployment:

• Seasonal

• Cyclical

• Frictional

• Structural

Seasonal Unemployment

Industry Regularly shuts down during a particular season

• Fantasy Island

• Adrien’s

Cyclical Unemployment

Contraction and Recession causes loss of jobs

• Companies lay off workers

• Jobs are gone

Frictional Unemployment

People are taking time to find another job

• Recent graduate & looking for a job

• Time off for education

Structural Unemployment

Structure of the economy changes, changing types of jobs available (skill set does NOT match job criteria)

• new technology (replacing jobs such as cashiers)

• not the right skill set

What is underemployment?

Those holding jobs but are not being held to their full potential of full hours

• someone with a college degree working part time for $8/hour

The Civil Rights Act of 1964

Illegal to discriminate employees based on race, ethnicity, gender, or religion

How does this country define poverty?

“Total income less than the amount to satisfy the family’s minimum needs.”

Causes that lead to Poverty:

• Lack of Education

• Location & Demographics

• Racial / Gender Discrimination

• Economic Shifts

Opportunities to those in poverty:

• Welfare Programs

• Welfare Reform

  → Temporary assistance until they find a job

• Enterprise Zones

  → Government lifts taxes in run-down areas

• Employment Assistance

  → Government creates job-training programs

• Community Outreach