Economics Chapter 5

http://www.cbc.ca/money/story/2009/02/06/januaryjobs.html

Summary:

As most of us know, we are currently in a recession. When a recession occurs, there is usually a high rate of unemployment. Current statistics have shown that there are many job losses. As a matter of fact, the job losses exceed the numbers of the 1980s and the 1990s. In just January alone, the unemployment rate went up by 0.6% to a current 7.2% unemployment rate in Canada. This unemployment rate is partly because of the 213,000 jobs that were lost ever since October 2008. To make matters worse, economic experts expect that this drop will continue for another six months or so. Although the unemployment rate is expected to increase, companies such as the Bank of Canada declared that they will cut interest rates to help solve the problem of this recession and the unemployment rate.

Chapter 5 Connections:

This is related to chapter 5 because it does talk about unemployment rates and the labour force. A survey known as the Labour Force Survey is complied monthly based on 50,000 households across Canada. This is used to determine the employed and unemployment rate. We can say that the survey in the present ended up with a high unemployment rate due to this recession. In fact, there is a formula for unemployment rate and that is: unemployment rate= unemployed / labour force. Out of all the types of unemployment, I believe we are going through a demand-deficient unemployment because many people are now purchasing fewer goods (not to mention, inflation), because of this recession; thus, the employers will have to lay off workers due to the fact that they are having difficulties selling their product. As a result, there is currently such a high unemployment rate in Canada.

Personal Reflection:

Being in the current labour force, I have witnessed many people that have been laid off. I also believe that the unemployment rate will increase for another six months or even longer. Canada usually has a higher unemployment rate compared to the United States, but right now, the unemployment rate for Canada is actually lower than the United States. Although there have been job loses in Canada, when we compare to our neighbours, the United States, they are doing worse than us. However, if we compare the unemployment rates of 1980s and the 1990s to the present, we actually have a lower rate right now. Overall, I believe that this is currently an economic drawback and not a crisis; therefore, I think jobs will be available to the unemployed within a year.