ECON Economics of Unemployment

[dstraito]

This discussion facilitates the common understanding of what unemployment does both at a local and a national level.

It is relevant as the current unemployment level has gone so high so fast.

Right now there is a huge national debate on whether to restart the economy or opt for safety and stay in quarantine. It is important to understand the impact that unemployment has on the nation in both macro and micro terms.

The short term unemployment is something as a nation we can deal with. If the trend extends into the future at such high rates it could directly affect our viability as a nation so it is important to understand.

Sadly it has become a political issue rather than doing what is best for the nation.

I am including articles to help with that understanding

 

[dstraito]

Definition of Unemployment - Economics Help
www.economicshelp.org/blog/2247/unemployment...
Nov 27, 2019 · This is also known as cyclical unemployment – referring to how unemployment increases during an economic downturn. Diagram showing fall in AD and lower output (Y1 to Y2)- which leads to higher unemployment. Structural Unemployment. This is unemployment due to inefficiencies in the labour market.

Unemployment is defined as a situation where someone of working age is not able to get a job but would like to be in full-time employment.

Note: If a mother left work to bring up a child or if someone went into higher education, they are not working but would not be classed as unemployed as they are not actively seeking employment.
One grey area is voluntary unemployment. This occurs when the unemployed choose not to take a job a the going wage rate (e.g. wrong job, benefits too high e.t.c) They could be counted as unemployed because they are still seeking a job (they just don’t want to take one they are offered.)

 

[dstraito]

Unemployment - Economics Help
www.economicshelp.org/macroeconomics/unemployment
Jan 07, 2018 · Unemployment Rate. This is the % of people in the labour force without a job but registered as being willing and available for work Labour Force Those people holding a job or registered as willing and able to work Therefore this is the number employed plus number unemployed (but actively seeking work)

Unemployment: a key concept in Economics
economicswebinstitute.org/glossary/unemploy.htm
Economic losses from unemployment are large, since they relate to all goods and services that could be produced by the unemployed, to income losses for the unemployed household, to consumption and employment losses caused by reduced demand of the latter, to a wide range of social pathologies and health diseases.

Texas Economist: Don't compare COVID-19 economic impact to ...
www.kvue.com/article/money/coronavirus-economist...
Apr 07, 2020 · Economists predict unemployment could soar to more than 30% as a result of COVID-19, ... Perryman is a world-renowned economist who holds a doctorate in economics.



Unemployment - Investopedia
www.investopedia.com/terms/u/unemployment.asp
Apr 03, 2020 · Unemployment is a key economic indicator because it signals the ability (or inability) of workers to readily obtain gainful work to contribute to the productive output of the economy. More...

United States Unemployment Rate - TRADING ECONOMICS
tradingeconomics.com/united-states/unemployment-rate
Unemployment Rate in the United States averaged 5.73 percent from 1948 until 2020, reaching an all time high of 10.80 percent in November of 1982 and a record low of 2.50 percent in May of 1953.

 

[dstraito]

The Effects of Unemployment on Society and the Economy
The Effects of Unemployment on Society and the Economy
All these affect not just the economy but the entire systems and the society in general. Here are some aspects of the impact of unemployment on our society: The effect of unemployment on our society. Unemployment affects not just the person himself but also his/her family and in the long run the society where he lives.

The Cost of Unemployment to the Economy - Investopedia
The Cost of Unemployment to the Economy
The Cost of Unemployment to the Economy It's not just the price of paying out benefits. FACEBOOK ... some of the more pernicious effects of unemployment are both subtle and very long-lasting ...

How Unemployment Rates Affect The Economy
How Unemployment Rates Affect The Economy
How Unemployment Rates Affect The Economy. ... I am sure that in your first economics class you learned that unemployment is a key macroeconomic indicator to determine the health of an economy.

How The Unemployment Rate Affects Everybody
How The Unemployment Rate Affects Everybody
A closely watched economic indicator, the unemployment rate attracts a great deal of media attention, especially during recessions and tough economic times. But unemployment doesn't just affect ...

 

[dstraito]

Bad Effects of Unemployment on Economic Growth
www.economicsdiscussion.net/articles/bad-effects-of-unemployment-on-economic-growth/2285
ADVERTISEMENTS: Read this article to learn about bad effects of unemployment on Economic Growth! Unemployment is a big problem which effects the economic growth of the country. It has following bad effects: (i) Exploitation of labour: ADVERTISEMENTS: Due to unemployment labourers are exploited. They have to accept low wages and work under un-favourable conditions. (ii) …

The economic effects of the coronavirus around the world ...
The economic effects of the coronavirus around the world
China's economy contracted in the first quarter of 2020 - the first time since records began in 1992. More than 5 million Americans filed for unemployment last week, bringing total US jobless claims to 22 million over a four-week period. The International Monetary Fund says Asian economies will see zero growth for the first time in 60 years.

What Is the Relationship between Economic Growth and ...
What Is the Relationship between Economic Growth and Unemployment?
The level of unemployment in an economy may affect the rate of economic growth, while the level of unemployment is also an indicator of the state of the economic growth of an economy. If economic growth is to be sustained, the general level of employment must not fall below a determined level.

 

[dstraito]

The Great Depression Vs. Coronavirus Recession: 3 Metrics ...
The Great Depression Vs. Coronavirus Recession: 3 Metrics That Will Determine How Much Worse It Can Get
Mar 24, 2020Unemployment. Peak unemployment during the Great Depression reached a staggering 24.9% in 1933, according to the Bureau of Labor Statistics; in 1929, just four years prior, unemployment was just 3.2%.

Unemployment During the Great Depression - Historyplex
Unemployment During the Great Depression - Historyplex
Unemployment During the Great Depression. The Great Depression, which began around 1929 and lasted almost a decade, was a massive economic downturn, worldwide. The implications of the largest economic depression in the 20th century, included unemployment on an unprecedented scale.

Unemployment Statistics during the Great Depression
Unemployment Statistics during the Great Depression
Despite the evidence of a national catastrophe, support for unemployment relief remained sketchy until FDR introduced the New Deal in 1933.---- Selected Quotes ---- Quotes regarding Unemployment Statistics during the Great Depression. By Jimmy Carter Any system of economics is bankrupt if it sees either value or virtue in unemployment.

Texas Economist: Don't compare COVID-19 economic impact to ...
Texas Economist: Don't compare COVID-19 economic impact to the Great Depression
Economists predict unemployment could soar to more than 30% as a result of COVID-19, but add comparing this to the Great Depression is inaccurate.

 

[Txkstew]

I work in the PetroChemical industry, that has cycles of about 8 years. It's highly dependent on the price of oil. The one slight exception, is the Chemical side. The good news, is the price of their feed stock goes down. The bad news, is the overall economy probably is down, and demand for Plastics and such are down as well. I don't think I'll be going back to work soon.

 

[raven]

When you find yourself making the case that "unemployment is good or is at least not as bad as it sounds"
then you are sitting pretty and got no worries.

I completely understand that position. In 2012, I was 58. I earned over 100k with ease.
I quit. Became unemployed by choice. I have earned no income since then.
Sold one home. and bought two more. Found a girl friend. Eat well. Have plenty to do.
Pay no social security tax or income taxes. No health insurance premiums.
I will collect SS in December . . . if they still have SS.
Being unemployed is great - I love it.
Doing nothing is all I every hoped it could be.

But none of you are me.
I would never sit at the end of the bar and preach to you that "unemployment is good"
because a mob would form with pitchforks, torches, and nooses.

Good luck making the case

 

[dstraito]

When you find yourself making the case that "unemployment is good or is at least not as bad as it sounds"
then you are sitting pretty and got no worries.

I completely understand that position. In 2012, I was 58. I earned over 100k with ease.
I quit. Became unemployed by choice. I have earned no income since then.
Sold one home. and bought two more. Found a girl friend. Eat well. Have plenty to do.
Pay no social security tax or income taxes. No health insurance premiums.
I will collect SS in December . . . if they still have SS.
Being unemployed is great - I love it.
Doing nothing is all I every hoped it could be.

But none of you are me.
I would never sit at the end of the bar and preach to you that "unemployment is good"
because a mob would form with pitchforks, torches, and nooses.

Good luck making the case

Been There
Done That
Got the TShirt

Love your comment about "found a girl friend", reminded me of the joke

Q: what do you call a musician without a girlfriend?
A: Homeless

I haven't worked since the end of 2016 but I have adjusted my expectations in life and now get by on SS.

 

[Kathy in FL]

Everyone that thinks this isn't an issue for them remember that unemployment of the current crop of tax payers will affect whether or not your pension, social security, etc. will be there when you really do reach an age you are not capable of financial self-sufficiency.

The dollars you already paid into the system have been spent, are gone, were never yours to count on to begin with. You are or will be living off the rest of us still working.

 

[dstraito]

There is a Latin term used in Economics

Ceterus Paribus

What Is Ceteris Paribus?
Ceteris paribus, literally "holding other things constant," is a Latin phrase that is commonly translated into English as "all else being equal." A dominant assumption in mainstream economic thinking, it acts as a shorthand indication of the effect of one economic variable on another, provided all other variables remain the same.


Rarely in life or economics is the condition all things are equal.

Using the ISLM economic model which is a series of graphs of important statistics, it becomes apparent when one factor is changed in the model, everything else does not stay constant but follows Newton's law of equal and opposite reaction.



What is the IS-LM Model?
The IS-LM model, which stands for "investment-savings" (IS) and "liquidity preference-money supply" (LM) is a Keynesian macroeconomic model that shows how the market for economic goods (IS) interacts with the loanable funds market (LM) or money market. It is represented as a graph in which the IS and LM curves intersect to show the short-run equilibrium between interest rates and output.

IS-LM Model: What It Is, IS and LM Curves, Characteristics, Limitations

The IS-LM model represents the interaction of the real economy with financial markets to produce equilibrium interest rates and macroeconomic output.

www.investopedia.com

KEY TAKEAWAYS

• The IS-LM model describes how aggregate markets for real goods and financial markets interact to balance the rate of interest and total output in the macroeconomy.
• IS-LM was devised as a formal graphic representation of Keynesian economic theory.
• IS-LM can be used to describe how changes in market preferences alter the equilibrium levels of GDP and market interest rates, but the model lacks the precision and realism to be a useful prescription tool for

Things like unemployment, GDP, interest rates, supply and demand, money supply can all after each other. Make a change in one area and it ripples through the economy in other areas.

The level of unemployment that just exploded on to the scene in this latest crisis is going to have major effects in other areas.

It is interesting to note the effect unemployment has on the other key variables in this model.

 

[hiwall]

Unemployment is great for many people right now. They get their regular unemployment from their state and the extra $600/week from the Federal gov. Many are making more on unemployment than they have made working in their whole lives.

 

[JasmineAndLace]

Unemployment is great for many people right now. They get their regular unemployment from their state and the extra $600/week from the Federal gov. Many are making more on unemployment than they have made working in their whole lives.

This is absolutely correct. When the powers that be first started talking about the stimulus plans, payroll protection plans, federal unemployment, etc. it was my understanding that the federal unemployment would be "up to" $600 a week to bring a person's unemployment equal to what they earned while working. When it went into effect it was a flat $600 on top of regular unemployment which means that many people are now bringing home more than they did while working. It is completely killing off the incentive to go back to work.

 

[20Gauge]

There is a Latin term used in Economics

Ceterus Paribus

What Is Ceteris Paribus?
Ceteris paribus, literally "holding other things constant," is a Latin phrase that is commonly translated into English as "all else being equal." A dominant assumption in mainstream economic thinking, it acts as a shorthand indication of the effect of one economic variable on another, provided all other variables remain the same.


Rarely in life or economics is the condition all things are equal.

Using the ISLM economic model which is a series of graphs of important statistics, it becomes apparent when one factor is changed in the model, everything else does not stay constant but follows Newton's law of equal and opposite reaction.



What is the IS-LM Model?
The IS-LM model, which stands for "investment-savings" (IS) and "liquidity preference-money supply" (LM) is a Keynesian macroeconomic model that shows how the market for economic goods (IS) interacts with the loanable funds market (LM) or money market. It is represented as a graph in which the IS and LM curves intersect to show the short-run equilibrium between interest rates and output.

IS-LM Model: What It Is, IS and LM Curves, Characteristics, Limitations

The IS-LM model represents the interaction of the real economy with financial markets to produce equilibrium interest rates and macroeconomic output.

www.investopedia.com

KEY TAKEAWAYS

• The IS-LM model describes how aggregate markets for real goods and financial markets interact to balance the rate of interest and total output in the macroeconomy.
• IS-LM was devised as a formal graphic representation of Keynesian economic theory.
• IS-LM can be used to describe how changes in market preferences alter the equilibrium levels of GDP and market interest rates, but the model lacks the precision and realism to be a useful prescription tool for

Things like unemployment, GDP, interest rates, supply and demand, money supply can all after each other. Make a change in one area and it ripples through the economy in other areas.

The level of unemployment that just exploded on to the scene in this latest crisis is going to have major effects in other areas.

It is interesting to note the effect unemployment has on the other key variables in this model.

I always had a problem with this in school. It was like the teachers didn't understand that people will adapt. They always qualified everything with "all things being equal" to explain when they screwed up.

 

[Blastoff]

Unemployment is great for many people right now. They get their regular unemployment from their state and the extra $600/week from the Federal gov. Many are making more on unemployment than they have made working in their whole lives.

My brother owns a small business, still working and has more work than ever - and his only employee stopped working because of this. There's no way his UE will get denied right now.

 

[Txkstew]

The max in Texas is $521 a week, pluse the Fed $600 or $1121 a week. It's paid bi-weekly, so $2242. Based on a 80 hour pay period, equals $28 per hour. That's for the highest earners. However, Texas sent me a letter saying that since I had earnings in Louisiana, I could file a claim with them instead, and get a max of $249 a week, pluse the $600 Federal bump. No thanks.

 

[dstraito]

I always had a problem with this in school. It was like the teachers didn't understand that people will adapt. They always qualified everything with "all things being equal" to explain when they screwed up.

I always wondered why my professors even mention it because when are all thing equal? Never

However, it is used by the dims when they want to raise taxes. They state we raise taxes y X amount

I always had a problem with this in school. It was like the teachers didn't understand that people will adapt. They always qualified everything with "all things being equal" to explain when they screwed up.

I always wondered why my professors mentioned it as when are all things equal? Never. The dims assume Ceteris Paribus when they talk about raising taxes. When they raise taxes by X amount, they immediately figure out how much more money they will have, all things being equal. Too often, one of those pesky factors like what it does to unemployment factors in and raising taxes brings in less money. go figure.

 

[Kathy in FL]

My problem is that they are not using the stimulus money for what it was designed to be. They are not paying their bills because of all of the moratoriums, etc. ad nauseum. We - meaning landlords and other such groups - are trying to put pressure on De Santis and our reps to end the moratorium on evictions early. Right now it is pushed back to the middle of May. Our primary reason is that the people that are supposed to benefit from this don't understand that they still OWE the rent, utilities, etc. They don't understand that the late fees continue to accrue. They don't understand that landlords can still be granted a writ of possession, but that the sheriff is not executing the writ … but that even then interest on the eviction will accrue. They aren't informed that the federally backed properties that are supposed to give 120 days is only a very narrow subsection of properties and that even then they will owe all of the rent for that period on the day that 120 days is over with. And they don't want to understand that ignorance of the law will not excuse them.

There is a lot of pressure that at the very least each county needs to come out with very simple explanations that are published and publicized. They don't want to do that and everyone can guess why. There should have been some accountability for the stimulus monies but no one wanted that. The only one really benefitting from the stimulus money is China because that is the kinda crap that is mostly being bought with all of those checks. Really makes me furious that we're subsidizing people's irresponsibility … my tax dollars at work.

 

[dstraito]

My problem is that they are not using the stimulus money for what it was designed to be. They are not paying their bills because of all of the moratoriums, etc. ad nauseum. We - meaning landlords and other such groups - are trying to put pressure on De Santis and our reps to end the moratorium on evictions early. Right now it is pushed back to the middle of May. Our primary reason is that the people that are supposed to benefit from this don't understand that they still OWE the rent, utilities, etc. They don't understand that the late fees continue to accrue. They don't understand that landlords can still be granted a writ of possession, but that the sheriff is not executing the writ … but that even then interest on the eviction will accrue. They aren't informed that the federally backed properties that are supposed to give 120 days is only a very narrow subsection of properties and that even then they will owe all of the rent for that period on the day that 120 days is over with. And they don't want to understand that ignorance of the law will not excuse them.

There is a lot of pressure that at the very least each county needs to come out with very simple explanations that are published and publicized. They don't want to do that and everyone can guess why. There should have been some accountability for the stimulus monies but no one wanted that. The only one really benefitting from the stimulus money is China because that is the kinda crap that is mostly being bought with all of those checks. Really makes me furious that we're subsidizing people's irresponsibility … my tax dollars at work.

I bet you love Omars recent bill

Cancel All Rent and Mortgage Payments

Rep. Ilhan Omar (D-MN) has proposed new legislation called the Rent and Mortgage Cancellation Act. The bill would institute a nationwide cancellation of residential rents and mortgage payments through the duration of the Coronavirus pandemic. Here’s how the bill would work:

• full payment forgiveness of rent For your primary residence
• full payment forgiveness of mortgage payments for your primary residence
• no accumulation of debt for renters
• no accumulation of mortgage debt for borrowers
• no negative impact on credit rating or rental history for mortgage borrowers or renters.

 

[hiwall]

I bet you love Omars recent bill

Cancel All Rent and Mortgage Payments

Rep. Ilhan Omar (D-MN) has proposed new legislation called the Rent and Mortgage Cancellation Act. The bill would institute a nationwide cancellation of residential rents and mortgage payments through the duration of the Coronavirus pandemic. Here’s how the bill would work:

• full payment forgiveness of rent For your primary residence
• full payment forgiveness of mortgage payments for your primary residence
• no accumulation of debt for renters
• no accumulation of mortgage debt for borrowers
• no negative impact on credit rating or rental history for mortgage borrowers or renters.

And what happens to the landlords?
With mortgages do the mortgage holders get bailed out?

 

[dstraito]

And what happens to the landlords?
With mortgages do the mortgage holders get bailed out?

Exactly

 

[NoMoreLibs]

Unemployment is great for many people right now. They get their regular unemployment from their state and the extra $600/week from the Federal gov. Many are making more on unemployment than they have made working in their whole lives.

Gonna suck next year when income tax is due on it.

 

[dstraito]

Gonna suck next year when income tax is due on it.

Unless you do not haveany other income between now and then

 

[Faroe]

Omar is an idiot.
Landlord still has insurance, trash, some utilities, maintenance, and the property taxes.
You can not maintain rental properties with no cashflow. The investment will be lost at the next tax sale.

 

[Kathy in FL]

I bet you love Omars recent bill

Cancel All Rent and Mortgage Payments

Rep. Ilhan Omar (D-MN) has proposed new legislation called the Rent and Mortgage Cancellation Act. The bill would institute a nationwide cancellation of residential rents and mortgage payments through the duration of the Coronavirus pandemic. Here’s how the bill would work:

• full payment forgiveness of rent For your primary residence
• full payment forgiveness of mortgage payments for your primary residence
• no accumulation of debt for renters
• no accumulation of mortgage debt for borrowers
• no negative impact on credit rating or rental history for mortgage borrowers or renters.

Don't even get me started. There are some that were proposing that at the state level. We've targeted them for when it is their turn for re-election.

And let me tell you, a lot of landlords are adding up what they are losing and plan on protesting that amount come property tax time. Many states use the income approach for property taxes of rental units. This is going to bite states on the butt big time and we've started letting our legislators hear the truth of that unexpected consequence as a way of putting them over a barrel.