Unemployment

• Unemployment
– Total number of adults (aged 16 years or
older) willing and able to work and who are
actively looking for work and have not
found a job

7-1
 Unemployment (cont'd)
Labor force = The employed + The unemployed
152.7* = 145.4 + 7.3

Unemployed
Unemployment rate = x 100
Labor force

7.3
= x 100 = 4.8%
152.7
*suppose
7-2
 Inflation and Deflation
• Inflation
– A sustained increase in the average
of all prices of goods and services in
an economy

• Deflation
– A sustained decrease in the average
of all prices of goods and services in
an economy
7-3
Inflation and Deflation (cont'd)
• Purchasing Power
– The value of money for buying goods
and services
– Varies with prices and income

7-4
 Changing Inflation and Unemployment:
Business Fluctuations (cont'd)

• Expansion
– A business fluctuation in which the pace of
national economic activity is speeding up

• Contraction
– A business fluctuation during which the
pace of national economic activity is
slowing down
7-5
 Changing Inflation and Unemployment:
Business Fluctuations (cont'd)

• Recession
– A period of time during which the rate of
growth of business activity is consistently
less than its long-term trend or is negative

• Depression
– An extremely severe recession

7-6
7-7
Is poverty a new concept?
What does this historical
image tell us about poverty?
 RELATIVE POVERTY: TOWNSEND STUDY

• Peter Townsend said

that people who do not
have what other people
take for granted are
poor.

• Look at the list he drew

up. Do you agree with
all of the points?
 RELATIVE POVERTY: TOWNSEND STUDY
• No holiday way from home in the last 12 months.
• No relative or friend to visit for a meal in the last month.
• Has not had a friend to play, or for tea, in the last month (under
15).
• Did not have a party on last birthday (children).
• Has not had an afternoon or evening out for entertainment in the
last two weeks.
• Does not have fresh meat at least 4 times a week.
• Has had one or more days in the last two weeks without a hot
meal.
• Has not had a cooked breakfast most days of the week.
• Household does not have a fridge.
• Household does not normally have a Sunday dinner.
• Household does not have: a flushing toilet, sink or washbasin
with cold water, a fixed bath or shower and a cooker.
 What are the reasons for poverty?
• It is the fault of individuals because
they have a different set of
cultural values.
• Immediate Gratification, when
people want pleasures now and do
not work for the future
• Fatalism, when people think, ‘what
will be’ and assume they cannot
escape from a bad situation
• Poor people do not have a good
work ethic and expect bad jobs
• Poor people are the victims of the
unequal distribution of wealth.
• The poor do not have enough
education to deal with money
problems.
• Some people who live in poverty
come from harsh backgrounds
(domestic violence).
• Many people do not possess the
skills to get out of poverty.
 Poverty and Education

Why might poor children find it difficult to do well in

school?
 The Cycle of Deprivation
Large families
Born poor
Family break up

Bad nourishment
Early parenthood

Bad area to live in

How true is
Ill health
this picture
Unemployment of why
people are
poor? Misses school

Criminal record

Few qualifications
Criminality for money

Low paid, difficult work