Econ Chapter 9
Define labor force.
A term used by the U.S. Bureau of Labor Statistics (BLS) to describe those Americans who have jobs or are seeking a job, are at least 16 years old, are not serving in the military and are not institutionalized. This figure represents all Americans who are eligible to work in the everyday U.S. economy.
Define employed.
Employed individuals are those who are over the age of 16 or older and work at least one hour a week, 15 hours a week in a family business, or hold jobs but did not work because of vacation, illness, bad weather or labor disputes. If an individual does not meet those requirements, they are considered unemployed.
Identify and explain the costs and benefits associated with different types of insurance, including deductibles, premiums, shared liability, and asset protection.
In general, all insurance policies allow a person or business to pay a relatively small amount of money (a premium) in the present to purchase asset protection against the possibility of a future financial loss caused by an unforeseen event. Assets protected range from one's home to one's health. Most insurance policies include a deductible stipulating the amount of money the insured must pay when filing a claim with the insurance company. In most cases, the higher the premium is, the lower the deductible is. This is true in reverse as well. Purchasing insurance involves shared liability between the insurer and the insured. This means that the insurance company assumes a predetermined amount of financial liability for a claim that the insured might file. The insurance company is obligated to pay for the loss since the insured has paid premiums for the financial protection. In some cases, people pay insurance premiums for years and never file a claim. However, most people know they would be unable to cover a catastrophic loss themselves and are willing to pay for the peace of mind insurance provides.
Identify and explain factors that affect wages.
In the United States, supply and demand determine the earnings of workers. The exception is minimum wage laws at the federal, state, and local level. Minimum wage is a price floor. If equilibrium wage falls below the price floor, employers are bound to paying the legal wage. In most cases, minimum wage affects only markets for the least skilled workers. The labor market is a resource market. Employers demand workers and workers supply their labor. The intersection of the labor demand and supply curves indicated the equilibrium wage in the market. Like a product market, changes in the economy shift the supply of and demand for labor altering the equilibrium wage.
Identify and explain various types of insurance such as automobile, health, life, disability, and property.
Insurance is a product purchased to guard oneself against life's risks (asset protection) and specifically the financial losses associated with these risks. One may not be able to avoid dying, but one can avoid leaving loved ones in financial ruin by purchasing life insurance. The law requires people to buy certain types of insurance while other types are voluntary. This course requires identification and description of five types of insurance: automobile, health, life, disability, and property. Most states in the U.S. require automobile owners to maintain a certain level of automobile insurance coverage. The required coverage is liability insurance. Liability insurance covers the other vehicle(s) when you are at fault in a car accident. If an owner wants coverage for their own vehicle, then they need to purchase collision insurance as well. Vehicles purchased with a loan from a financial institution require collision insurance until paid in full. It is important for vehicle owners to know the level of insurance required by law may not adequately cover all damages in an accident. The other driver can sue the at fault driver for any additional damages. Health insurance pays for medical services. As of April 2017, federal law required people to have a certain level of health insurance or pay an annual penalty when filing federal taxes. Health insurance plans vary widely from those protecting against catastrophic care to plans paying for routine wellness visits. Life insurance provides a monetary payment to a designated beneficiary when the insured person dies. The beneficiary is one who experiences financial harm from the death of the person covered by the policy such as a spouse, a parent, or a child. Disability insurance provides people with income in case they become injured or are unable to work at a job. Many employers offer disability insurance as an option in worker benefits packages. Short-term disability covers temporary work restrictions such as the period of recovery from childbirth or surgery. Property insurance takes a variety of forms. The most common types are homeowners and renters insurance. Homeowners insurance pays for damages sustained to your real estate property and for injuries to others that happen on your property. Renters insurance protects your personal property assets when you live in a rental property instead of a home you own.
Explore job and career options and explain the significance of investment in education, training, and skill development as it relates to future earnings.
Since societies are constantly changing, and their economies— and marketplace demands— change as well. At some point in the 20th century, people who excelled at selling typewriters could probably have demanded a high salary for their work. Today, this expertise is no longer in demand, so work would be hard to get and at a much lower wage than it once was. In general, three factors determine the wage a worker can expect. The strength of demand for workers in the market, the number of workers supplying their labor in the market, and the amount of specialized knowledge, skills, training, and licenses are required to do the job. As a rule, the more knowledge, skills, education, and training a worker has, the higher the wage the worker can expect assuming their education applies to a field with strong employer demand. The chart below from the Bureau of Labor Statistics shows the correlation between level of education and median weekly wages. It also shows how likely people in each education level are to be unemployed.
Identify and explain skills that are required to be successful in the workplace, including positive work ethics, punctuality, time management, teamwork, communication skills, and good character.
Successful workers practice key behaviors known as soft skills. Soft skills every worker needs include: work ethic, punctuality, time management, teamwork, communication skills, and good character. Work ethic refers to how seriously one pursues the expectations associated employment. People with good work ethic practice all the soft skills listed above. When at work, people with good work ethic spend their time pursuing the goals of the job and producing excellent results to the best of their ability. Examples of poor work ethic include spending work hours pursuing personal interests, finding ways to avoid work, letting coworkers perform one's assigned job functions, doing the minimum amount of work required to get by, and/or not following the rules outlined by the employer. Punctuality means arriving on time and ready to work at the established time. Many employers of young workers express concerns how many lose their jobs due to lack of punctuality. Most workers divide their work time among many different tasks and responsibilities. Workers with good time management skills efficiently organize their work hours to accomplish all objectives with minimal stress. Today's workplace is increasingly flat. This means rather than many layers of managers, many people work on teams lead by peers or lead teams of peers. These teams are often cross-functional meaning they are composed of people with different skill sets. Teamwork is part of most jobs. Team members need to work well with each other, support each other, and perform their assigned tasks well. Excellent verbal and written communication skills help workers perform their jobs well. This means knowing how to get your ideas across to someone else and using appropriate style, grammar, and/or spelling. These skills help everyone understand what is expected and keep people motivated. Poor verbal and written communications skills cause workers to be viewed negatively and can cause conflict. In dangerous or high-risk environments, poor communication skills could put lives at risk. Good character refers to doing the right thing every time. Today's workers often enjoy a lot of freedom in how and where they work. Working remotely requires discipline to stay on task and meet goals. Employers need workers who behave ethically. Poor character traits include stealing from an employer, lying, plagiarizing the work of others, and treating co-workers or customers poorly.
Explain the "learning effect" and "screening effect".
There is a greater emphasis on college graduates over high school graduates because of the learning effect. This is the theory that more education results in higher productivity and higher wages. The screening effect is for employers who regard college and high school graduates as educated and hard-working individuals and will result in workers who are better because of their innate skills. Successful completion of high school = time and effort. Successful completion of college = time, effort and money.
Describe the relationship between supply and demand for labor and the connection between wages and skill levels.
Wages increase/decrease with the supply and demand of jobs in the market. Typically, the more skills required equals more pay. Benefits as well as wages can be tied to the supply and demand of jobs in the market.
