Econ Case

In: Business and Management

Submitted By affuno
Words 855
Pages 4
Case summary:

First the writer argued with the way that the government agency calculates unemployment, and the following caused inaccuracy in their estimations:

1. Mythical jobs: The government could not identify them; it made an assumption about trends and they are in industries such as finance that have absolutely no job creation.

2. Unpaid leave. These people don't count on the unemployment rolls. 3. At least 1.4 million people weren't counted among the unemployed, because they hadn't searched for work in the four weeks preceding the survey.

4. Stealth underemployment: The number of workers taking part-time jobs because of the slack economy, a kind of stealth underemployment, has doubled in this recession to about 9 million, or 5.8% of the work force.

5. Full-time workers are being downgraded to part-time as businesses slash labor costs to remain above water.

6. The average length of official unemployment increased to 24.5 weeks. This is the longest term since the government started to track these data in 1948.

7. The average worker saw no wage gains in June, with average compensation running flat at an average of $18.53 an hour.

8. The jobs report is even uglier when you consider that the sector producing goods is losing the most jobs -- 223,000 in the last report alone.

9. The prospects for job creation are equally distressing. The likelihood is that when economic activity picks up, employers will first choose to increase hours for existing workers and bring part-time workers to full-time status. More layoffs in this recession have been permanent and not temporary. “Instead of shrinking operations, companies have closed whole business units or made sweeping structural changes in the way they conduct their business”

How this case is related to the chapter, first we need to explain how does unemployment and job losses impact…...

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