Chapter 33 - Jobs and Unemployment

In what way would the guaranteed jobs program outlined in the text be more expensive if it provided useful jobs for society?

More people would participate and higher employment levels would raise wages.

Someone who believes that unemployment is an individual's responsibility will believe that the current measure of unemployment:

overstates the true level of unemployment because all unemployment is voluntary.

Structural unemployment is caused by:

people losing a job when their skills become obsolete due to technological innovations.

The safety net in the proposed guaranteed jobs program differs from the current safety net because unlike the current program, the guaranteed jobs proposal provides a safety net to those people:

who either don't have a job or haven't held a job for very long.

What will likely lower cyclical unemployment?

The economy expands.

Name four reasons why the target rate of unemployment has increased over the past 40 years.

The population has become younger. More women have entered the workforce. Unemployment benefits and welfare have been implemented. Globalization.

Since a jobs program puts people to work, would it impose costs on society?

Yes, because there are administrative costs and possible forgone employment costs.

Why does the author suggest that students be ineligible for the guaranteed jobs program even though many students are in need?

Limiting eligibility reduces the cost of the program and students often seek only part-time employment.

Does the unemployment rate underestimate or overestimate the unemployment problem? Explain.

The unemployment rate could underestimate or overestimate the problem, depending on how a person views those who are not working or working less than desired.

Categorize each of the following as cyclical or structural unemployment: c. A sales person loses her job because the economy is sluggish.

This is cyclical correct unemployment.

Categorize each of the following as cyclical or structural unemployment: a. A journalist loses her job because the work is now online.

This is structural correct unemployment.

Categorize each of the following as cyclical or structural unemployment: b. An unemployed person turns down job offers that are not in the field of his previous job.

This is structural correct unemployment.

During the past few recessions, government ran expansionary policies, but the duration of unemployment has risen. What does this suggest about the change in structural unemployment over this time period?

This suggests that structural unemployment has risen

The concept of unemployment involves normative judgments because some people view employment as:

an individual responsibility and some view employment as a social responsibility.

Cyclical unemployment:

can be reduced with demand side policies.

With respect to the unemployment problem, social responsibility framework economists generally take the position that:

each person should have a job commensurate with their training or past job experience.

A decline in the number of immigrants into the United States would most likely reduce:

the target rate of unemployment.