Unit 2 Macro: The Economic Disaster of Youth Unemployment
The official figures show that there are now more than one million young people counted as unemployed in the UK although the precise scale of the jobless crisis is difficult to measure accurately. Nonetheless, it represents a fundamental economic, social and political problem and one that policy makers must address.
In this video report from Al Jazeerah, Lawrence Lee visits Leeds to find a well qualified nineteen year old with good qualifications but who cannot afford to go to university and is finding it tough to win a place in the police force - his main ambition.
read more...»Unit 1 Micro: Can the UK Computer Games Industry Grow
Britain is one of the world’s biggest exporters of creative products - from live TV shows and music to books, arts, architecture and films the economy has built up an enviable global reputation for excellence and a growing trade surplus to aid our balance of payments.
Computer games falls squarely into this category but, according to TIGA - the trade association representing the UK’s games industry - unless there is renewed government support, the future of this sector is at risk. TIGA claims that the British games industry is suffering a significant ‘brain drain’ as talented programmers and artists leave the country to work abroad.
read more...»Unit 2 Macro: Living below the Breadline
This article on the appalling depth of workless households in Liverpool is a reminder of the multiple aspects of relative poverty and economic/social exclusion.
The causes of unemployment are complex - many are structural - but it is hard to draw much if any optimism from reading this article. By some estimates over one third of households in Liverpool have no one in work and second and third generation unemployment is not uncommon. This is a must article for students to read if they want a better awareness of the human cost of non-employment. Read: Below the breadline on Liverpool’s workless estates
read more...»Unit1 Micro: Can a minimum wage create jobs?
Tim Harford has a piece in his regular column in the Financial Times which discusses some of the issues surrounding the minimum wage and whether a legal pay floor can actually create jobs. Here is the link
Newsnight on rebalancing the UK economy
Last night’s edition of Newsnight should be required viewing for all AS and A level economists - and it is a huge shame that it is only available on i-player for another 7 days. Introduced on the shock news that even Tesco is vulnerable to the downturn, it included reports from Andrew Verity looking at whether the British economy will ever wean itself off shopping and the City, and an excellent (and all-female!) discussion including Deborah Meaden and the FT’s Gillian Tett. Try challenging your students to watch and listen to this while noting down every aspect of the syllabus which is mentioned or referred to - that will keep them busy!
There was also a debate between Employment Minister Chris Grayling and disability campaigner Sue Marsh about the government’s welfare reforms, defeated in the House of Lords the night before, and finally Tokyo correspondent Roland Buerk looking at Japanese economic stagnation of the late 1980s and 90s, to consider whether it was a “lost decade” and what could be learnt from it.
Unit 4 Macro: Does Manufacturing Matter?
Vicky Pryce FRSA has a new article on the economic significance of manufacturing industry for UK economic renewal. It is available here from the January 2012 edition of the RSA Journal. In a related article Sir Christopher Frayling FRSA discusses the rise of the Maker Movement.
Back in November 2011 Channel 4 news ran a special on the future for UK manufacturing here is a link to a related video
Unit 2 Macro: A Jobs Boost for the US Economy
Could 2012 provide stronger news for the US economy and offer President Obama a decisive electoral dividend in the run up to the November Presidential Election?
The recent jobs data in the USA looks more promising for hopes of a significant pick-up in growth and employment all of which will help attempts to control the fiscal deficit. This news report from AlJazeera looks at the latest US unemployment figures. Falling unemployment provides a platform for rising aggregate demand and stronger short term economic growth. And stronger economic activity in the world’s biggest economy is good news for the UK too!
read more...»Unit 2 Macro: Revision Quiz on Economics of Unemployment
Here are some revision multiple choice and type the correct answer questions on aspects of unemployment - designed for students taking AS Macroeconomics. Provide correct answers and see who gets the top score on the crystal cannon! The quiz has been created using Zondle.
read more...»Unit 4 Macro: Video Resources on Unemployment
This blog entry brings together a selection of recent news reports and videos covering the economics of unemployment in the UK and inother countries.
read more...»Unit 4 Macro: Human Capital and Economic Growth
In A2 macroeconomics the underlying causes of economic growth and development and constraints on both of these are covered in more depth. One of the concepts students might be familiar with is that of human capital.
I have always summarised the idea of human capital as being a measure of the overall quality of the human input available to produce goods and services in an economy. The ONS have published a new study on the value of human capital in the UK and they draw on a definition given by the OECD
read more...»Unit 4 Macro: The Rise in Self Employment
One feature of the jobs market data in the UK in the last couple of years has been the surge in measured levels of self-employment (the data is collected as part of the huge Labour Force Survey)
The total number of self-employed people in the UK increased by 166,000 in the three months to the end of November to reach 4.14 million - this is the highest number of self-employed people since comparable records began in 1992.
What helps to explain the growth of self employment? Optimists might claim that it is a sign of a pick up in entrepreneurial activity in Britain as many people who have been made redundant decide to strike out on their own by starting a new business.
A more realistic explanation is that rising self employment is a sign of macroeconomic weakness. Hundreds of thousands of people have lost their jobs and a sizeable number will simply re-categorise themselves as self employed when they are quizzed as part of the Labour Force Survey. They are likely to be scouting around for jobs and are much likely to take one or more part time jobs when they can.
Part time employment was up sharply, but do not forget that the number of full-time employees fell by 188,000 in the three-month period covering August, September and October - that is more than 2,000 people per day losing their jobs.
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Unit 4 Macro: Does UK Manufacturing have a Future?
Here are links to two superb short reports on prospects for UK manufacturing as the British economy struggles to escape from recession and sluggish growth forecasts in 2011 and 2012. Both are from Channel 4 News that produced a special on the health of the manufacturing sector - excellent for evaluation and for some applied examples to build into essays. The links appear below
read more...»Unit 2 Macro: Will a Youth Jobs Subsidy Work?
The Coalition Government recently heralded a new scheme designed to address the structural problem of high youth unemployment in the UK economy. Under their “youth contract” plan, employers will be given “wage incentives” worth £2,275 to take on some 160,000 18-to-24-year-olds. But will it have much impact on the problem? The independent Office for Budgetary Responsibility says that the net effect on overall unemployment will be close to zero, because the subsidy incentive will lead to a switch in employment away from older workers.
read more...»UK unemployment in November 2011 - a video overview
The presentational style might leave a little to be desired, but this analytical ONS video might provide colleagues with a different teaching resource to help explain the rapid rise in UK unemployment.
read more...»Unit 2 Macro: A Prezi on Unemployment Policies
After a hesitant start and some time spent getting to know the user interface, I am starting to use Prezi more widely as an alternative to other presentation software. I would be really keen to share ideas and collaborate on presentations with other colleagues so if you are interested in joining up please let me know. Here is an initial presentation I used this afternoon on unemployment policies - focusing on ten strategies to reduce unemployment. The aim is to stimulate discussion among students who can take apart the proposals and substitute their own.
read more...»AS Macro: The State of British Business
How well is British business coping in the aftermath of recession and during a sluggish recovery? Are there signs of improvement or are there warning signs that the UK business sector is fragile and vulnerable as we head into 2012? Four AS macro students - James Richardson, Ludo Higgin, Joe Landman and Nick Russell collaborated on this excellent piece and searched for some revealing clues about the resilience of British businesses at this crucial stage of the economic cycle.
read more...»Unit 2 Macro: Video Clips on Unemployment
I blogged last week about unemployment and made available some updated charts on unemployment for the UK and a range of other countries. Here are some short video news clips on aspects of unemployment that I have been using when teaching unemployment to AS and A2 groups. These clips provide a window on the human and social cost of high rates of unemployment and are especially useful in reinforcing the causes of unemployment and evaluation of policies likely to be most effective in bringing jobless rates down over time.
read more...»Here there be NEETs.
Regional unemployment is seen as a significant economic problem, but employers may be reluctant to relocate if the educational quality of the workforce is below par. The term NEET refers to young people Not in Education, Training and Employment, and it appears that there are significant pockets of NEETs across the mainland of Great Britain.
read more...»Unit 4 Macro: Unemployment Chart Resource Download
At this time of the year many teachers are covering aspects of unemployment - causation, measurement, consequences and policies directed to reduce the scale of the jobless problem. Here is a completely up to date chart set covering unemployment data for the UK and a number of other countries. It is available for free download using this link. I hope it proves useful for some colleagues.
Unit 2 Macro: A Widening Regional Divide in Life Expectancy
Life expectancy in the United Kingdom continues to improve. But one important aspect of the deep and structural divide in incomes, economic activity and status and health across different groups in Britain is the marked variation in average life expectancy for men and women. The UK Statistics Commission has just published new data on this covering the period 2004-2010 and finds that:
read more...»Unit 2 Macro: Positive and Negative Multiplier Effects
An initial change in aggregate demand can have a much greater final impact on equilibrium national income. This is known as the multiplier effect. It comes about because injections of new demand for goods and services into the circular flow of income can stimulate further rounds of spending – in other words “one person’s spending is another’s income”. Put another way, spending becomes someone else’s income. This can lead to a bigger eventual effect on output and employment.
Here are three recent news videos covering aspects of the multiplier effect at work:
read more...»UK Unemployment in October 2011
There were some desperately disappointing unemployment and employment numbers published for the UK economy today. Even taking due note of the need not to focus too much on one set of data the UK labour market looks to be weakening as fast as the autumn leaves are falling. The human and social cost of the high jobless figures is enormous and the macroeconomic effect of fewer people in work and paying taxes will dent further hopes of a solid recovery.
read more...»Unit 4 Macro: Unit Labour Costs and Inflation
Over many years the rate of change of unit labour costs (ULCs) has been a decent reliable indicator of inflationary pressures in the UK economy. Times when wage costs adjusted for productivity have grown quickly have often coincided with a rise in the annual rate of inflation - little wonder when payroll costs are a sizeable chunk of operating expenses for many businesses.
But in the last couple of years we have seen a growing disconnect between unit labour cost inflation and the published figures for CPI.
read more...»The Bicycle - A merit good and an integral part of sustainable transport solutions?
A recent economic study1 found that bicycle ownership can boost household income in sub-Saharan Africa by 35%. I may be biased given my passion for cycling but I think there are indeed some very strong economic arguments for encouraging more bicycles both in the developing and the developed world.
The bicycle: more than just a mode of transport
NMW: Classical real-wage unemployment
As the government increased the NMW this weekend by 15p to £6.08 an hour for adults….....the minimum wage may be pricing young people out of work because employers are finding it too expensive to give them their first job, Government pay advisers have said. Good application here for discussing real-wage classical unemployment.
Read more here.
Balancing the Consequences of Unemployment
This week, my AS economists have been working on developing their analytical skills in an attempt to produce a more balanced argument. At times it is too easy to take a particular viewpoint and I find this is never more apparent than when considering the consequences of unemployment (where usually we focus on the negative aspects).
read more...»“We need to make more stuff, using the same number of people…”
So says Stephanie Flanders, in this broadcast from the Today programme in which she explores whether or not the growth in employment this week is a good thing. The key, of course, is productivity and the economy’s capacity to grow, and therefore to recover. She explains the interrelationship between manpower and output with her usual clarity,with a brief reference to both sides of the issue, and to the short term and long term consequences of the recent rise in private sector employment - thus giving an ideal essay plan!. This is such a key concept in AS macroeconomics (and A2 as well) that I think this two-and-a-half minute piece is well worth saving and using with new groups of economists next term.
Unit 2 Macro: Reducing Unemployment after a Recession
How quickly do people find new work after they have been made redundant and experienced a period of unemployment?
According to new research published in the May 2011 edition of the Economic Journal, only around one person in every ten unemployed in Britain finds fresh work within a month and nearly half of the extra unemployed created in the wake of an economic shock such as the fallout from the global financial crisis are still without a new job after six months.
If government economic policies and the labour market generally are failing to get people back into paid jobs the impact of a recession on unemployment rates can last for a substantial time period bringing with it increased economic and social costs.
read more...»The rising cost of the minimum standard of living
The Joseph Rowntree Foundation has just published its annual report into Minimum Income Standard for the UK, reported here by the BBC, and showing how much money is needed for an acceptable standard of living. They look at the effects of tax and benefits on the budgets for different family types to show the wage you need to earn in order to have enough to afford what ordinary members of the public (their definition) agree is needed to survive and take part in today’s society.
read more...»Protection of British jobs?
Is this protectionist, or is it common sense? Today’s headlines are all about Ian Duncan Smith’s speech in which he urges British employers to give young unemployed workers in the UK a ‘level playing-field’ and a better chance of getting the jobs which are being created.
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