Unemployment.
Unit1.The labor Force and Society’s Production Possibilities.
Lead in
Exercise1. Read and try to answer the questions.
Losing a job- or not being able to find one- is a painful experience for just about
anyone. Jobless workers also represent a loss for the macro economy. If fewer people
are employed, then the total quantity of output will be smaller. We all lose something
when workers are without jobs. The purpose of this lecture is to develop a clearer
sense of what unemployment is all about and who suffers from it.
Before reading the text, discuss the following questions:
1. What do you think the main causes of unemployment are?
2. What can be done to solve the problem of unemployment?
3. Can you give an example of countries where the level of unemployment is
very high?
Exercise2. Think of as many words as possible related to the theme
“unemployment”.
e. g. cheap labor, living standards, salary, wage, …
Reading.
Exercise3. Read the text and fill in the sentences which have been moved
out from the text.
a. There is a limit to the quantity of goods and services an economy can
produce in any time period. In general, our production possibilities are
limited by two factors.
b. Constraints are also imposed on the use of material resources and
technology. We will not cut down all the forests this year and build
everybody a wooden palace. The federal government limits annual tree
harvest on public lands.
c. Our first concern, then, is to distinguish between those individuals who are
ready and willing to work and those individuals who, for institutional or
personal reasons, are not available for employment.
d. Although resource availability and technological know-how clearly limit our
potential GNP, production has other constraints as well.
e. Individuals are also regarded as employed in a particular week if their failure
to work is due to vacation, illness, strike or bad weather.
The Labor Force.
To get a sense of what our unemployment problem is all about, we need to
clarify the concept of "full employment." Full employment does not mean that
everyone has a job. On the contrary, we can have "full employment” even when you
are going to school, people are in the hospital, children are playing with their toys at
home, and older people are enjoying their retirement. We are not concerned that
everybody be put to work, but only with ensuring jobs for all those persons who are
ready and willing to work and who desire and seek jobs.
1.__________________________________.The labor force consists of
everyone over the age of sixteen who is actually working plus all those who are not
working
but
are
actively
seeking
employment.
2.___________________________________.Also unpaid family members working in
a family enterprise (farming, for example) are regarded as employed. People who are
neither employed nor actively seeking work are not regarded as a part of the
labor force; they are referred to as "nonparticipants." Figure 6.1 shows how
population participates in the labor force:
.FIGURE 1 The labor Force
Total population
In the labor force
-civilian employed
-armed forces
-unemployed
Out the labor force
-under age 16
-homemakers
-in school
-retired
-sick and disabled
-institutionalized
-other
Note down that the definition of the labor force excludes most households and
volunteer activities. For example, a woman who chooses to devote her energies to
household responsibilities or to unpaid charity work is regarded as outside the labor
market (a "nonparticipant"). But if she decides to seek a paid job outside the home and
engages in an active job search, we would say that she is "entering the labor force."
Production Possibilities.
The distinction between our labor force and our total population can be
illustrated by production-possibilities curves.3._______________________________.
• Resources
• Technology
Figure 2 illustrates the limits to our production of any two goods (here called
simply "consumption goods" and "investment goods"), given some level of resources
and technology. With all our resources devoted to the production of consumption
goods, we could produce the amount B of such goods in a year. By devoting all our
resources and technology to the production of investment goods, we could produce A
of such goods. In the more likely situation that we chose to produce some of both
goods, we could have any combination of goods represented by the curve AB.
4.____________________________.In particular, the size of our labor force is
much smaller than the total number of bodies in the country. In fact, we have imposed
very strict limits on the amount of labor that may be used in production. Child-labor
laws, for example, prohibit small children from working, no matter how much they or
their parents yearn to contribute to total output. To the extent that small children,
students, and others are precluded from working, both the size of our labor force (our
available labor) and our potential output shrink.
5. ___________________________.The federal government also restricts the
use of nuclear technology. In both cases, environmental protection constrains the use
of resources or technology and limits annual output. For the same reasons, we restrict
the use of land, water, and air, and discourage the use of potentially hazardous
chemicals and production processes. These are institutional constraints on our
productive capacity.
The physical production possibilities of society are those that would exist in
the absence of institutional constraints. The Institutional production possibilities are
those that incorporate social constraints on the use of resources.
FIGURE 2. Physical vs. Institutional Production Possibilities
investment goods
A
D
H
F
P hysic a l
p ro d uc tion
p o ssib ilitie s
Institutio na l
p ro d uctio n
p ossib ilitie s
G
E
B
c o n s u m p tio n g o o d s
• Unemployment rate =
number of unemployed
people
labor force
Vocabulary exercises.
Exercise4. Fill in the appropriate words from the list below. Use the
word(s) only once.
Labor, institutional; to enter; to ensure; benefit; constraints; developing;
child-labor; unemployment; strike.
1. unemployment…benefit…
2. ….jobs
3. social……
4 ….production possibilities
5. …… countries
6. labor…….
7. ……..the labor force
8. ……..rate
9. ……..law
10. ……. force
Exercise 5.Match the idioms with the definitions.
1. All work and no play makes Jack a dull boy.
2. A bad workman always blames his tools.
3. no pain no gain
4. to make a living
5. work like a beaver
6. to do somebody else’s dirty work
7. the donkey work
a) an irresponsible worker who refuses to take the responsibility when
something goes wrong
b) to earn money from doing some form of work
c) the hard, often boring or tiring part of a job
d) if you don’t push yourself, you will not get any benefits
e) to work very eagerly and quickly
f) a person who spends all his time working will become uninteresting
g) to do something someone else doesn’t want to do or can’t face
Exercise 6. Fill in the correct word(s) from the box:
unskilled labor
available labor
to ensure jobs
to retire
have been made redundant
strike
constraints
unemployed
1. The introduction of new technology such as computers creates a surplus of
… ( not having or requiring a particular talent or ability)
2. A two-day miners’ ... for more pay and better working conditions made the
government satisfy their requirements.( a period when people protest by
refusing to work)
3. The board of directors took the decision ... some members of the staff but
didn’t replace them.( to make an employee stop work because of age)
4. The essence of our unemployment problem is that we don’t make full use of
our... (human recourses that can be obtained)
5. The restriction of the use of land, water, air, hazardous chemicals and other
resources or technologies are referred to as institutional ... ( limitations)
6. People often end up on the dole because they ...- their employer decided that
their services were no longer required as the company went bankrupt.( have
been dismissed because there is no longer any work)
7. Our main task is to ... for all those persons who are ready and willing to work.
( to provide with regular paid work)
8. The results of the survey put the number of ... at more than 5 times what it
was 20 years ago.( people with no jobs)
Exercise 7. Find the definitions of the words given in the box:
a strike
a go-slow (GB)
charity work
slowdown( US)
to picket
collective
bargaining
industrial action
1. negotiations between unions and employers about their members’ wages and
working conditions
2. a stoppage of work, as a protest against working conditions, low pay, and so
on
3. a general term for strikes, go-slows, etc.
4. to protest outside a factory or other workplace and try to persuade workers
and delivery drivers not to enter
5. a deliberate reduction in the rate of production, as a protest
6. work done to help poor people
Talking Point
1. How strong is the economy in our country?
2. How would you estimate the level of unemployment in Russia?
3. Would you say Russia was about to enter a period of economic growth or
decline?
Unit2.MACRO and MICRO CONSEQUENCES: LOST OUTPUT
Reading
Exercise 1. Read the text and answer the questions:
1. What does Arthur Okun’s law show?
2. What is the impact of unemployment on individuals?
3. What has an unemployed person rely on if he/she needs financial support?
Macro consequences.
Unemployment influences the gross national product (GNP) If we fail to employ our
entire labor force, we will not produce as much output as our institutional production
possibilities (curve DE) permit. According to "Okun's Law"—a rule of thumb devised
by the economist Arthur Okun—each additional 1 percent of unemployment translates
into a loss of 3 percent in real GNP.
Although the prospect of loss of goods and services may sound exciting, some
people might question whether maximum production is really a desirable goal. After
all, what's the difference whether we produce $5.23 trillion or $5.27 trillion? We've
already glutted the streets with cars and the air with pollution. Why worry whether or
not we are fully utilizing production possibilities?
Resource utilization is of vital concern for two reasons. So long as any private
or public needs remain unfilled, we have a social use for unemployed resources.
Maybe we do have enough cars on the streets already, but what about other goods and
services? Do we have enough parks, schools, and clean rivers? If not, we could use
some of our idle resources to produce these things. By not using all oar resources not fully utilizing our institutional production possibilities - we are forgoing
potential output. Even if we felt (and few people do) that all our private and public
needs had been met, we could still use our factors of production to aid the rest of the
world.
Micro consequences.
Society's interest in full employment also has micro roots. Not using all our
available labor means that somebody is without a job. That may be all right for a day
or even a week, but if you need some income to keep body and soul together,
prolonged unemployment can hurt. The same is true for plant and equipment or for
land. If available machinery or farmland is not used, then somebody's income is going
to be in jeopardy. To the extent that society as a whole cares about the welfare of
individuals) the full utilization of our productive resources - full employment - is a
desirable social goal.
The immediate impact of unemployment on individuals is the loss of income
associated with working. For workers who have been unemployed for long periods of
time, such losses can spell financial disaster. Typically, an unemployed person must
rely on a combination of savings, income from other family members, and government
unemployment benefits for financial support. Nevertheless, the experience of
unemployment - of not being able to find a job when you want one - can still be
painful. This sensation is not easily forgotten, even after one has finally found
employment It is difficult to measure the full impact of unemployment on individuals.
Exercise 2. Decide if the following statements are true or false.
1. Maximum production is the most desirable goal of the society.
2. According to the text, we have a social use for unemployed resources if any social
needs remain unsatisfied.
3. The full use of all our production possibilities doesn’t affect our potential GNP.
4. Full employment is a desirable goal of any society if its goal is to raise the income
of individuals.
5. Full employment GNP is the market value of our institutional production
possibilities.
Vocabulary exercise
Exercise 3. Find the words in the text which mean the following:
1. a result or an effect of something else
2. to allow something
3. a supply of something that a country, an organization or an individual has and can
use, especially to increase wealth
4.something that can be used or obtained available
5. a strong impression or effect on somebody/ something
6. money provided by the government to those who are entitled to receive it
Unit 3. Types of Unemployment.
Reading:Text1.
Exercise 1. Read the text and complete the table:
Types of Unemployment
Type
Characteristics
Seasonal
Unemployment caused by changes
in weather and seasons affects
seasonal workers.
Some industrialized countries have had somewhat more success in maintaining
low unemployment rates, but none has reached zero unemployment. It has been
suggested that "full employment" should not be understood as "zero unemployment,"
but rather as some low (nonzero) level of unemployment.
At first blush, the abandonment of zero unemployment as a national goal might
look like an artful attempt to rationalize our historical failures. But there are reasons
for believing that zero unemployment is neither possible nor desirable.
Seasonal Unemployment.
Seasonal variations in employment conditions are one persistent source of
unemployment. Some joblessness is virtually inevitable .
Seasonal fluctuations also arise on the supply side of the labor market. Teenage
unemployment rates, for example, rise sharply in the summer as students look for
temporary jobs.
Frictional Unemployment.
Many workers leave one job to look for another. In the process of moving from
one job to another, a person may well miss a few days or even weeks of work without
any serious personal or social consequences. On the contrary, job seekers who end up
in more satisfying or higher-paying jobs as a result of their job search will be better
off, and so will the economy.
The same is true of students first entering the labor market. It is not likely that
you will find a job the moment you leave school. Nor should you take any job just
because it's available. If you spend some time looking for work, you are more likely to
find a job you like. The job-search period gives you an opportunity to find out what
kinds of jobs are available, what skills they require, and what they pay. The
unemployment associated with these kinds of job search is referred to as frictional
unemployment.
Three things distinguish frictional unemployment from other kinds of
unemployment. First, we assume that enough jobs exist for those who are frictionally
unemployed. Second, we assume that those who are frictionally unemployed can
perform the available jobs. Third, we assume that the period of job search will be
relatively short.
Structural Unemployment.
For many job seekers, the period between jobs may drag on for months or even
years because they do not have the skills that employers require. Imagine, for
example, the predicament of coal miners when their mines are mechanized. If they
have worked in the mines for ten or fifteen years, they are unlikely to have developed
other occupational skills. They may be first-rate miners, but they stand little chance of
filling job openings for computer programmers. In this case, there may be as many
vacant jobs in the economy as job seekers, but the unemployed coal miners will not be
able to fill any of them. Hence we say that the coal miners are structurally
unemployed.
Cyclical Unemployment.
There are still other forms of unemployment. Of special significance is cyclical
unemployment - joblessness that occurs when there are simply not enough jobs to go
around. Cyclical unemployment exists when the number of workers demanded falls
short. It is simply an inadequate level of demand for goods and services and thus for
labor.
The Great Depression is the most striking example of cyclical unemployment.
The dramatic increase in unemployment rates that began in 1930 was not due to any
increase in "friction" or sudden decline in workers' skills. Instead, the high rates of
unemployment that persisted for a decade were due to a sudden decline in the market
demand for goods and services.
In general, we can say that our goal is to avoid as much cyclical and
structural unemployment as possible, while keeping frictional unemployment
within reasonable bounds.
Exercise 2. Decide if the following sentences are true or false.
1.Full employment is regarded as a zero level of unemployment.
2. Structurally unemployed are those who lose their jobs due to technological
advances.
3. Frictional unemployment is caused by changes in the seasons or weather.
4. Cyclical unemployment occurs when the number of workers demanded falls short.
5. One of the main goals in stabilizing the economy is to keep the unemployment rate
at a low level.
Vocabulary exercises
Exercise 3. Find the words in the text which mean the following:
1. continuing without interruption
2. to change frequently in a way that is not regular
3. suddenly
4. something that can be obtained or used
5. organized in a particular way
6. a person who looks for or tries to find/ to get the specified thing
7. the ability to do something well
8. regularly repeated
Exercise 4. Match the following terms to the definitions below, and use them to
label the drawings:
classical unemployment
seasonal unemployment
cyclical unemployment
structural unemployment
frictional unemployment
voluntary unemployment
1. . ..... exists in trades or occupations where work fluctuates according to the time
of year.
2........... exists when people choose not to work, often because they cannot find jobs
that pay enough money (e.g. more than social security benefits).
3........... is temporary unemployment that arises when people voluntarily leave a job
to look
for another one.
4........... is the loss of jobs caused when wages are too high.
5........... occurs during recessions, when the overall demand for labour declines.
6........... occurs when the skills of available workers do not match the jobs vacant.
I lost my job with 4,000 other
people when they closed down the
coal mine.
It's crazy - the only jobs available
round here pay less than I get from
Social Security.
I work with a travelling circus in
the summer, but it’s just closed for
the winter
I'm a skilled electrician, but there's
such a slump in the construction
industry right now that I’m out of
work.
The union went on strike for an
8% pay rise. They got it, but the
company laid off ten of us.
I left my job last week after an
argument with my boss. I'm sure I
can find something better.
Exercise 5. Match the words and their definitions:
1. to appoint smb.
a) no longer in employment because there’s
no more work available
2. to take on
b) the age when a person stops doing
regular work because he/she has
reached a particular age
3. to fire
c) to employ or to engage smb.
4. to hire
d) an order to leave a job
5. lay-off
e) to dismiss an employee from a job
6. redundant
f) to choose smb. for a job or position of
responsibility
7. the sack
g) to employ smb. for a short time to do a
particular job
8. retiring age
h) a period of time when one isn’t working
or doing something that one normally
does regularly
Exercise 6. Fill in the gaps with the words from ex. 5 in the correct form.
1. He was ... for stealing money from the till.
2. Her husband had a six-week ... due to injury.
3. We must ... somebody to act as a secretary.
4. According to the results of the last check in our department some employees were
given ... .
5. Although the company’s official ... is 60, she has decided to retire early.
6. On the last meeting the board of directors decided ... a new lawyer to protect the
company’s interests in the court.
7. She was ... as a graduate trainee.
8. To avoid going bankrupt, the company plans to cut back its expenditures and to
make a further 50 staff... .
Reading: Text 2
Exercise 7. Read the text about changes in Britain's economic activities and
decide if these statements are true (T) or false (F).
a Britain's experiences are unique.
b There is less heavy industry in Britain today than there was in 1970
с There are hardly any heavy engineering firms left. …
d North Sea oil and gas have had both positive and negative effects on
Britain's economy. …
e Sheffield depended heavily on the steel industry. …
f Lifetime employment is still common. …
g Some people have found jobs in areas such as banking and
telecommunications.
h Cambridge is important for the computer industry…
Britain has suffered the pain of ‘de-industrialization’. In particular, heavy
industry- the backbone of the economy ever since the industrial revolution- has
been declining for decades. Since the mid 1970s many traditional jobs have
disappeared or else have been transformed. Thousands of manufacturers have gone
out of business.
The damage to Britain’s industrial heartland makes depressing reading. Compared
with half a century ago, only a handful of heavy engineering firms have survived.
When the steel industry died, the proud city of Sheffield was brought to its knees.
More than 10,000 jobs were lost there in the eight years between 1986 and 1994.
When North Sea oil and gas were discovered it seemed the answer to the country’s
energy needs. Yet it also signalled the end of traditional coal mining. 140 coal mines
closed between 1984 and 1986. In the new millennium, British coal mining is
practically extinct.
People used to progress naturally from school to factory and, after fifty years in the
same firm, retirement. A job for life has become a thing of the past. Long-term
unemployment waits for those whose skills are outdated. On the other hand, people
who have retrained or who have more flexible skills have been able to find positions in
new high-tech industries or services. There are regional success stories too, the once
sleepy university town of Cambridge has miraculously transformed itself into a centre
for the computer industry- Britain’s answer to Silicon Valley.
Speaking
Look at the notes below, then imagine you are the Prime Minister of your
country and give one- minute talk about the causes of and solutions to
unemployment.
Causes: cheap labor in developing countries-workers demand higher wagescomputers need a small number of operators- continued strikes- unskilled labor
pushes down wages
Solutions: retraining workers- compulsory military service- banning trade unions- job
creation schemes- lower retirement age to 50- three day’s work instead of five.
References
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Division of Thomson Learning Inc.1995
2. Mackenzie, Ian English for Business Studies, Student’s and Teacher’s Books,
Cambridge University Press 1997
3. Harvey, Jack Mastering Economics, Mcmillan Press LTD 1994
4. Evans, Virginia, Dooley, Jenny Mission: FCE 2 Course Book Express Publishing
2000
5.Oxford Advanced Learner’s Dictionary of Current English, A.S. Hornby Oxford
University Press 1995
6. Oxford Dictionary of Business English for Learners of English, Oxford University
Press 1993
7. Naunton, Jon Head for Business Intermediate Student’s Book, Oxford University
Press 2000
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язык для студентов экономических факультетов”-М.: Издательство
ПРИОР.1999г.
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“Учебники и учебные пособия”ю Ростов-на-Дону: “Феникс”
2002