Unemployment ( ) & Scenes from Roger and Me. 1. What are some examples of frictional unemployment?

Transcription

1 E&F/Raffel Unemployment ( ) & Scenes from Roger and Me 1. What are some examples of frictional unemployment? 2. Seasonal unemployment is common in which industries? 3. What is structural unemployment? 4. What are the five major causes of structural unemployment? 5. What is cyclical unemployment?

2 The Unemployment Rate and the Recession About the Unemployment Rate: The U.S. Department of Labor calculates an official unemployment rate (U3) by using the following formula: # of people unemployed/# of adults in the civilian labor force The civilian labor includes people who are actively looking for a job over the past four weeks and people over 16 years old. It excludes people who have left the labor force by choice, full time students, prisoners, people in institutions, people who are too discouraged to look for work. Task: For each scenario below, explain whether the person would be counted in the official unemployment rate. Scenario: Johnny Smith received a Wii for his 14 th birthday, but what he really wanted was a bicycle. He is looking for an after school job so that he can buy his bike. Jane Jones worked at General Motors for 17 years before losing her job in January. She has stopped looking for work because no other auto companies are hiring in Flint, MI After losing his $250,000 per year job as an investment banker, Marvin Moneybags delivers pizza part time for Dominos. Because of budget cuts brought on by the recession, Donna Kelly lost her job in the Boston Public School system last month. She has sent out resumes to 15 Massachusetts school systems seeking work. Bernice Haynes, was an engineer at BMW s in Greenville, S.C. factory. Given the downturn in the automobile industry, she is now repairing golf clubs for a local sporting goods store. Mr. Raffel is a teacher. He took his family to the beach in July and August. Jacqueline Murphy is a soldier with the 101 st airborne division. She was recently discharged and is looking for work. Stephen Harrison recently started a one year unpaid leave from his teaching job to take care of his 4 year old son. Bridgit Jones recently quit her office temporary job to return to graduate school to earn an MBA John Richards quit his job as a nurse to take care of his elderly mother full time Carly Donaldson is an accountant who is also in the Army reserve. She was recently sent to Iraq. Counted in official Unemployment rate? (Y/N) and why

3 The film Roger and Me takes place in Flint Michigan, a city that once proudly employed 80,000 G.M. workers. When the film was made in 1989 Flint s hard times which had begun in the mid 1960s got far worse, as G.M. began to scale back its operations. As we watch the film, which can be thought about as illustrating the impact of structural unemployment, please answer the questions below: Review: What is the multiplier effect? 1. Every Day a Great Day A. Describe the Flint of Michael Moore s boyhood (mid 1950s or so). 3. Back to Flint B. Which of the five causes of structural unemployment are described in this scene? What others might be involved? 4. GM Headquarters C. Who is Roger Smith? D. Why does Michael Moore want to meet with Roger Smith?

4 E. In the 1950s, a popular expression was What s good for General Motors is good for America. Is this still true today? 5. Repercussions F. How has the autoworker profiled in this scene dealt with the constant threat of losing his job? G. What has been the impact on Flint of the GM layoffs? H. Remember our discussion of the multiplier effect. How would an economist explain what happened to Flint as a result of the GM layoffs? 6. Presidential Visit I. What advice does Presidential candidate Ronald Reagan give to potential voters in Flint who have lost their jobs? J. Why might it be difficult for Reagan s audience to follow this advice?

5 8. Deputy Fred at Work K. Why does Deputy Fred have the only secure job in Flint? Parade/Miss America; Poor People Note the contrast between the parade in this scene to the parade we saw at the start of the film (which also featured a Miss America). L. Both the governor and the head of the UAW said that another sit down strike would not work today. Are they right? Why or why not? M. How many evictions had Deputy Fred done on the one day Michael Moore followed him? 15. Anita Bryant/Pat Boone N. What advice do these two celebrities give to the laid off residents of Flint? Amway Lady Janet, Taco Bell/Lint Rollers, Bunny Lady O. Describe Janet s background. P. Why does she make a panicked call to Michael Moore in the film?

6 Q. What other jobs are available to laid off autoworkers? R. What are the problems with these jobs? S. Is it really true that there s as much opportunity in Flint today as there was when Billy Durant started General Motors in the 1920s? Why or why not? (HINT: think about the multiplier effect). T. What do we learn about the Bunny lady in this bizarre scene? 20. Police Blotter U. Why is crime increasing in Flint? V. What is the major new job opportunity that results? W. How do these new jobs compare with the jobs that have disappeared from the GM plant? 22. People on the Move X. What two examples show that many Flint residents are leaving?

7 24. Tourist Mecca In this scene, three new businesses come to Flint a Hyatt Hotel, a downtown shopping mall, and the Auto World theme park. Y. What impact does the construction of the buildings have on Flint s aggregate demand curve in the short run (say, 6 months)? Z. Why do these businesses fail (Hint: think again of the multiplier effect) 27. Burning Money Magazine/Nightline AA. What is your reaction to this scene? 28. Jailhouse Rock Gala BB. What impact did the construction of the new jail have on Flint s aggregate demand curve in the short run? (6 months) CC. Will it have a long term impact on aggregate demand?

8 29. Shareholder Meeting DD. What happens at a shareholder s meeting? EE. What happened to Michael Moore at this meeting? Plant s Final Day/A Dickens Christmas FF. How does the film end? Reflection question: How should society respond to structural unemployment?