|INSTRUCTOR DISCUSSION NOTES:
Jobs Drift Downward
1. Discuss the difference between nominal wages and real wages.
Nominal wages are the so called money wages. They can be described as the amount that workers see on their paychecks. Real wages are those same nominal wages adjusted for inflation. As inflation increases a fixed amount of nominal wages loses its purchasing power. Generally, if inflation increases by five percent, than a given level of nominal wages will buy five percent fewer goods and services. Economists compute this loss of purchasing power by taking out the influence of the inflation using a price index.
2. Visit http://www.bls.gov/cps/cps_faq.htm and create a list that includes all people who are considered unemployed.
The link is to the website of the U.S. Department of Labor, Bureau of Labor Statistics. It is a page of frequently ask questions. Students will find that unemployed persons are (1) All persons who were not classified as employed during the survey reference week, made specific active efforts to find a job during their prior 4 weeks, and were available for work. (2) All persons who were not working and were not waiting to be called back to a job from which they had been temporarily laid off.
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