Course: Economics 201
Objective: The effect of inflation on the job market
Date: 05 - 05 - 2003
The Effects of inflation on the Job Market
In the major industrial countries, low unemployment usually creates inflationary pressures. But during the recent economic expansion in the United States, prices have held steady despite low unemployment. Inflation is generally defined as an upward directional increase in the average of prices. Most people tend to be concerned about it because it reduces the purchasing power of the income earned by households. Though a few exceptions most commodities accentuate to this general assumption, all other things being equal. On the contrary the job market is a database of positions available for either a specific profession or the pool of potential applicants nation wide. With the use of visual aid and extensive explanations I will relate the connection between inflation and the Job market in America.
Inflation is caused by increasing the quantity of money used in purchasing a fixed amount of goods. This could also happen by reducing the number of goods available for a fixed "nominal" amount of money. On both sides money is subjected to it's intrinsic relevance. Meaning peoples expectation of return varies when tendering a barter object.
In mutualism, the job market consists of all available positions available to all individuals sixteen years and above who are willing and able to work. In a deeper context the basic component of the job market is the minimum wage. The minimum wage is the lowest hourly salary that an employer is allowed to pay an employee for services rendered. The Federal Labor board sets the minimum hourly labor rates. The lowest hourly rates are decided by a collective bargaining, an arbitration and a board action legislation. Minimum wage laws were passed to ensure that employees are reasonably compensated. However exceptions to this include volunteer services, family businesses and...