Wages The Scenario: -The auto manufacturer is facing increased

competition from overseas automobile companies and needs to cut costs in order to stay competitive. -The company C.E.O. has just announced that she is considering cutting wages as a cost-saving measure.

Questions- Each Group needs to answer

1. How would wage cuts affect members of your group?

2. What alternatives to wage cuts can you think of for cutting costs? How would these alternatives affect members of your group?

3. Do you think that wage cuts are the best solution to the problem? If so, why? If not, what do you think would be the best solution?

4. What do members of the other four groups have to gain from listening to your point of view (is it important for members of other groups to have you on their side)?

Standard

SSEMA1b- Define unemployment SSEMA1c- Calculate the

Unemployment rate SSEMA1d- Identify the types of

unemployment

Measuring Unemployment People available for

work who made specific effort to find a job during the last month and who, during the most recent week worked less than one hour for pay or profit

The Unemployment Rate The number of unemployed

individuals divided by the total number of persons in the civilian labor force

# unemployed/ civilian labor force = unemployment rate

The Unemployment Rate

Kinds of Unemployment

1. Frictional2. Structural3. Cyclical4. Seasonall

Frictional Unemployment Unemployment caused by workers who

are between jobs for one reason or another

Structural Unemployment Unemployment that occurs when a

fundamental change in operation of the economy reduces the demand for workers and their skills

Structural Unemployment

Cyclical Unemployment

Unemployment directly related to swings in the business cycle

Seasonal Unemployment Unemployment resulting from

changes in the weather or changes in demand for certain products

Effects of Unemployment Fewer workers means lower

productivity which leads to lower GDP

Aggregate Demand and Supply are lower because of lower wages, goods and services

Color Circle

White- Frictional Yellow – Structural Green- Cyclical Red- Seasonal Orange- Technological Define your type of unemployment

and then give an example of it.

Ice Cream Cone

When you are through, raise your hand. I will give you a brown cone.

On here, write the equation for the unemployment rate.

As a group answer… Why is unemployment bad for the economy? How might it signal a recession?