Merry Christmas all you unemployed!

http://www.csindy.com/colorado/noted/Content?oid=2390717

This article talks about the amount of unemployed isn’t decreasing, and might even increase after Christmas holidays. The seasonal jobs that are available are being taken by fresh-out-of-college students looking for a job over Christmas. Although some companies are trying to increase their year-round employees, and not just hire for the holidays, the rate of unemployment isn’t decreasing.  During the Christmas time there might be 60 applications for a single minimum wage paying job. Many unemployed don’t see seasonal jobs as worth while because they are already receiving unemployment benefits, and they know that after this season, they will be without a job once again, so what’s the point?

This article relates to our class because we just covered the differences between the different types of unemployment- including seasonal unemployment. This is a perfect example because during Christmas, retail shops need more help due to Christmas, Hanukah, New Years, etc.  But when the holiday season is done,  those employees are not needed anymore. 

Economic Growth in the USA

Economic Growth in the USA

This article from the New York Times talks about how economic growth has increased in the United States of America. It went up from 3.5%, a whole 1.5% higher than the first quarter. Economists predict that the Economic Growth in the USA will keep increasing at a constant 2% for the next 2 years. But for USA to recover from the recession, it needs a 4% per year increase. One economist shared that people are talking about there being a second recession, so for the time being a 2% increase is a very good start for the USA. The real income has increased, and the people who are applying for unemployement benefits has decreased, boosting the countries economy forward.

This article relates to our class because we are talking about unemployment right now and what a country can/should do to decrease unemployment. Also I was looking over some notes from last year and I was just reviewing economic growth vs economic development, so it ties in perfectly with what I have been going over. Also this article is a perfect real-world example of what we learn in IB economics, specifically unemployment, real income,  economic growth, etc.

http://www.nytimes.com/2011/10/28/business/economy/us-economy-shows-modest-growth.html

The Supply Side Economics of Abortion

This article talks about how to reduce the number of women getting abortions now-a-days. The article says that many states in the United States of America, the state officials are focusing on supply-side policies rather than the demand-side policies. If the supply of doctors who are capable of doing this operation decrease, then the amount of abortions will decrease as well. The article states that there are specific qualifications that each hospital must have to be able to abort a baby, and the requirements are very specific, so not every hospital has them. This causes the supply of places to decrease. The United States of America hopes that if the supply of places where the operation is able to occur, decreases, then the quantity of abortions in the country will decrease as well.

This relates to what we are studying now because we are focusing on different supply-side and demand-side policies and talking about which ones are better for the government and for the economy of a country. 

http://www.washingtonpost.com/blogs/ezra-klein/post/the-supply-side-economics-of-abortion/2011/10/20/gIQApcl70L_blog.html

John Maynard Keynes

    John Maynard Keynes was born on the 5th June, 1886 in Cambridge, England. His father was an economist and a lecturer at the University of Cambridge. His father's love towards economics greatly influenced Keynes when he was growing up. In 1911 he was made the editor of the Economic Journal- Britain's foremost economics publication.  After being the principal representative of the British Treasury at the Paris Peace Conference in Versailles in 1919, he wrote 'The Economic Consequences of the PEace' in which he wrote about how it is impossible for Germany to pay the amounts demanded of it.'  

     He is most known for the Keynesian economics. His views on the economy can be easily described as the opposite of 'laissez faire'. "In economics, laissez-faire describes an environment in which transactions between private parties are free from state intervention, including restrictive regulations, taxes, tariffs and enforced monopolies" (wikipedia).  

Keynes promoted the idea that the government should intervene in the economy to fill the gap. 

Reducing Unemployment

Supply-side Policies: policies that aim at increasing the aggregate supply of an economy, shifting the AS curve to the right

Some possible ways of increasing the aggregate supply including improving education, making available better health services, the government providing better infrastructure and possibly improving the institutional framework. Another possibility could be do decrease minimum wage. But if that were to be done, even the most honest companies, would abuse this policy and pay their workers much less than what they deserve.

Demand-side-Policies: policies that attempt to increase or decrease (or more precisely, to slow down the increase) in aggregate demand in order to affect output (growth), employment and the average price level.

There are 2 types of demand-side policies:

1.     fiscal policy- manipulation of the level of government expenditures and/or of taxes

2.     monetary policy- refers to changes in interest rates

Overal I think that supply-side policies are much more effective because there is a wide range of things that the government could do that could make the consumers happy.

stories!

Frictional Unemployment 

Meet June; graduate of Brown University for almost half a year now, and yes, still unemployed. She majored in Business Administration, and has a masters degree in Economics. She’s pretty normal- straight brown hair, green eyes, average height and weight. She has sent out her resume to 11 companies, all in her range of study, and now she has to endure the worst part: to wait for their responses.  Every morning she checks her email, phone, fax, mailbox- everything that couldn’t possibly bring her the good news. But so far, nothing. She keeps looking online for openings that could possibly interest her, and has gone to a few interviews over the last few weeks. As each day ends, she hopes that after just a few restless hours of sleep, she will wake up to find an inviting response to one of her applications.

Seasonal Unemployment

Merhaba! My names Ralf, and yes, I’m also unemployed.  I live in Bodrum, Turkey and during the summers I am a windsurf instructor. I graduated from the university of South Carolina, and ever since then, for 6 years now, I’ve been living in Bodrum, teaching windsurfing. I usually work from the beginning of May to end of August. Usually I get enough money over these 4 months to be able to pay the rent and have enough money left over for food and other necessities, but my apartment recently flooded so all of my savings have gone into fixing it, so here I am, like so many others in this world, looking for a job. I majored in mechanical engineering, so I’m trying to find something that is remotely close to my area of study, but so far- no luck.  But hopefully soon.

Structural unemployment

Frank, 47 years old, married, lives in Kansas, unemployed. For as long as he can remember, his family has been a family of farmers and now a new trade agreement on potatoes (that he mostly grew) was developed and he isn’t getting the money that he would have liked. Frustrated he quits farming in hopes to find a better job. Sorry Frank, the economy isn’t great right now and the amount of available jobs is scarce. So for now, he is unemployed.

Demand-Deficient Unemployment
Oh Boris, poor old Boris. He used to be a worker at the factory which produced matryoshka's. But now, the Russian government decided that it is much cheaper to produce all of the pieces of matryoshkas in China; moving their whole factory to China. But ofcourse, none of the workers could move with their beloved factory, so no job for Boris. It has been already 2 months that he has been unemployed, but to him it seems like he was fired a year ago. His savings are slowly decreasing, and he lives with just enough money for the basic necessities. He searches for jobs everyday, for example he applied for a job interview last week at the factory that produced Barbies, but they declined him because he accidently said that he didnt like the color pink.

Real Wage Unemployment 

Meet Dylan; fresh out of university. Finally, only after 2 weeks of searching, he found a great first job being the 'handy man' at a publishing firm. He didn't get payed much and had to work very hard. He brought coffee for his boss, called to arrange meetings, filed papers; basically all the busy work. But he was just out of university so he was still very motivated. But only 8 months into the job, he is told that the minimal wage of the country has increased, and so the company has to fire people. The company apologized, but told him that they would no longer be needing his services. Dylan, now unemployed, is strangely in great spirits. He keeps sending out resumes to different firms to find any job that could one day get him to his goal- to be a famous journalist. 

Obama Stimulus Plan

Obama's focus in this plan is to decrease the rate of unemployment. He wants to cut taxes, spend more money on schooling, offer the unemployed a subsidized training program and extend unemployment benefits. All of these will help the employment rate increase by providing more jobs, as well as make it easier and more beneficial for companies to hire new workers.

In the short run this plan is very risky and un-beneficial because a lot of money is being spent on something that is not 100% trustworthy. There is a risk that the US government has to take in order to give this plan a chance to work itself out. In the long run, the economy will benefit because more and more people will start working again, and after a few years, the companies will have to pay taxes on their workers, and so the government will slowly gain the money spent back. The economy as a whole will prosper because the people will be happier, and will therefor work harder.

I think this is a very good project because it is very practical and is sure to work. The US unemployment rate will decrease in a matter of years, gaining popularity for Obama, and faith of a better future for those who are in need now.

Obama's Stimulus Plan-Full Article