Unemployment

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ФЕДЕРАЛЬНОЕ АГЕНТСТВО ПО ОБРАЗОВАНИЮ ГОСУДАРСТВЕННОЕ ОБРАЗОВАТЕЛЬНОЕ УЧРЕЖДЕНИЕ ВЫСШЕГО ПРОФЕССИОНАЛЬНОГО ОБРАЗОВАНИЯ «ВОРОНЕЖСКИЙ ГОСУДАРСТВЕННЫЙ УНИВЕРСИТЕТ»

UNEMPLOYMENT Учебно-методическое пособие

Составитель И.Г. Агафонова

Издательско-полиграфический центр Воронежского государственного университета 2009

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Утверждено научно-методическим советом факультета романо-германской филологии 17 февраля 2009 г., протокол № 2

Рецензент ст. преп. Н.И. Балобина

Пособие подготовлено на кафедре английского языка гуманитарных факультетов Воронежского государственного университета.

Рекомендуется для студентов 2 курса экономического факультета.

Для специальностей: 080100 (521600) – Экономика; 080500 (521500) – Менеджмент

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CONTENTS Assignment 1. Unemployment .............................................................................4 Assignment 2. Types of Unemployment ..............................................................8 Assignment 3. The Private Cost of Unemployment ........................................... 14 Assignment 4. The Social Cost of Unemployment ............................................ 19

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ASSIGNMENT 1 UNEMPLOYMENT Pre-reading task I. Answer the questions. 1. High unemployment was one of the major problems in the 1990s. Will it continue? 2. Unemployment arises only because greedy workers are pricing themselves out of a job. Do you agree? II. Read Text 1. Unemployment (Text 1) Not everyone wants a job. Those people who do are called the labour force. The UK labour force comprises all those people holding a job or registered with the local office of the Department of Employment as being willing and available for work. The participation rate is the percentage of the population of working age who declare themselves to be in the labour force. The postwar growth of the UK labour force has been caused less by an increase in the population of working age than by an increase in the participation rates, most notably by married women. The unemployment rate is the percentage of the labour force who are without a job but are registered as being willing and available for work. Of course, some people without a job are really looking for work but have not bothered to register as unemployed. These people will not be included in the official statistics for the registered labour force nor will they appear as registered unemployed. Yet from an economic viewpoint, such people are in the labour force and are unemployed. For the moment, when we present evidence on the size of the labour force or the number of people unemployed, it should be understood that data refer to the registered labour force and the registered unemployed. There are two main points about the unemployment rate in the UK. First, unemployment was high during the interwar years, especially during the Great De4

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pression of the 1930s. It was the persistence of high unemployment that led Keynes to develop his General Theory. Second, by comparison, the postwar unemployment rate was tiny until the late 1970s. By the early 1980s it was starting to get back to prewar levels. This basic pattern applies in many other industrialized countries. However, the UK has been more successful than other countries, especially in Western Europe, in bringing unemployment down in the late 1980s. III.

Answer the questions.

1. What were the reasons of the postwar growth of the UK labour force? 2. What factor may distort the official statistics? 3. Why does the author compare the UK with other countries in Western Europe? IV. Check up the pronunciation of unfamiliar words in a dictionary and read Text 2 aloud. Unemployment (Text 2) 1. Not everyone wants a job. 2. Those people who do are called the labour force. 3. The UK labour force comprises all those people holding a job or registered as unemployed. 4. They are being willing and available for work. 5. The participation rate is a certain percentage of the population of working age. 6. They declare themselves to be in the labour force. 7. The postwar growth of the UK labour force has been caused by two factors. 8. They are an increase in the population of working age and an increase in participation rates by married women. 9. The unemployment rate is a certain percentage of the labour force. 10. It includes those who are without a job. 11. But they are willing and available for work. 12. Some people without a job are really looking for work. 13. Nevertheless they have not bothered to register as unemployed. 14. These people will not be included in the official statistics. 15. Yet from an economic viewpoint, such people are in the labour force and are unemployed. 16. In the UK unemployment was high during the interwar years. 17. High unemployment was persistent. 18. It led Keynes to develop his General Theory. 19. The postwar unemployment was tiny until the late 1970s. 20. By the early 1980s it was starting to increase. 21. This basic pattern applies 5

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in many other industrialized countries. 22. The UK has been more successful than other countries. 23. It brought unemployment down in the late 1980s. V. Write out from Text 2 English equivalents for the following words and expressions: 1. не каждый, нуждаться в работе; 2. те люди, называть, рабочая сила; 3. включать (охватывать), иметь работу, зарегистрированные как безработные; 4. быть готовым, быть наличным; 5. доля рабочей силы в общей численности населения, количество (в процентах), рабочий возраст; 6. объявлять себя, рабочая сила; 7. послевоенный рост, вызывать; 8. увеличение, замужние женщины; 9. уровень безработицы; 10. включать, быть без работы; 11. хотеть; 12. искать работу; 13. однако, побеспокоиться; 14. официальная статистика; 15. с экономической точки зрения, такие люди; 16. высокая безработица; 17. устойчивый; 18. заставлять, разрабатывать, общая теория; 19. очень маленький, конец семидесятых; 20. начало восьмидесятых; 21. основная модель, применяться; 22. успешный, более ……. чем; 23. снижать. VI.

Translate Text 2 into Russian (in writing).

VII. Translate the Russian version of Text 2 into English (orally). VIII. Make up meaningful phrases with the following: 1. the postwar growth, the labour force, to be caused; 2. they, to be an increase in the population, an increase in participation rates; 3. the unemployment, to be, a certain percentage; 4. it, to include; 5. but, they, to will, to work, to be available; 6. some people, to look for work; 7. in the UK, unemployment to be high; 8. high unemployment, to be; 9. it, to lead Keynes, to develop; 10. the postwar unemployment, to be tiny; 11. it, to start; 12. this basic pattern, to apply, industrialized countries; 13. the UK, to bring unemployment down. IX.

Replace the Russian words and expressions with their English equivalents:

1. The UK labour force comprises all those people (имеющие работу) or registered as unemployed. 2. The participation rate is a certain percentage of the population of (рабочий возраст). 3. The postwar growth of the UK labour force (вызываться) by two factors. 4. They are an increase in the population of working age and in increase 6

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in participation rates by (замужние женщины). 5. The unemployment rate is a certain percentage of (рабочая сила). 6. It (включать) those who are without a job. 7. Some people without a job are (действительно) looking for work. 8. Nevertheless they have not bothered to register as (безработные). 9. These people will not be included in (официальная статистика). 10. In the UK unemployment was high during (годы между войнами). 11. The postwar unemployment was (очень маленький) until the late 1970s. 12. (К началу восьмидесятых) it was starting to increase. X.

Make the following sentences into questions.

Example:

Those people who want a job are called the labour force. Who are called the labour force?

1. The UK labour force comprises all those people holding a job or registered as unemployed. Whom does the UK labour force …............? 2. They are being willing and available for work. What are they ……………? 3. They declare themselves to be in the labour force. What do they …............? 4. The unemployment rate is a certain percentage of the labour force. What is ……………? 5. It includes those who are without a job. What does it ……………? 6. Some people without a job are really looking for work. How are people without a job ……………? 7. These people will not be included in the official statistics. Why won’t these people ……………? 8. In the UK unemployment was high during the interwar years. When was unemployment ……………? XI.

Summarize in 10 sentences the contents of Text 1.

XII. Translate into Russian the last paragraph of Text 1. 7

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XIII. Show why the following statements are incorrect. 1. The average duration of an individual’s unemployment rises in a slump. This suggests that the problem is a lower outflow from the pool of unemployment, not a higher inflow. 2. So long as there is unemployment, there should be pressure on wages. 3. Unemployment is always a bad thing. 4. The microchip will inevitably cause a permanent increase in the level of unemployment. ASSIGNMENT 2 TYPES OF UNEMPLOYMENT Pre-reading task I. Answer the questions. 1. What is the difference between voluntary and involuntary unemployment in your opinion? 2. Unemployment means misery, social unrest and hopelessness for the unemployed. Do you agree? Give your explanation. II. Read Text 1. Types of Unemployment (Text 1) Economists used to classify unemployment as frictional, structural, demand-deficient, or classical. We discuss each in turn. Frictional Unemployment. This is the irreducible minimum level of unemployment in a dynamic society. It includes people whose physical or mental handicaps make them almost unemployable, but it also includes the people spending short spells in unemployment as they hop between jobs in an economy where both the labour force and the jobs on offer are continually changing. Structural Unemployment. In the longer run, the pattern of demand and production is always changing. We discussed the reasons why particular countries in the world economy come to specialize in the production of particular 8

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commodities at particular times. In recent decades industries such as textiles and heavy engineering have been declining in the UK. Structural unemployment refers to unemployment arising because there is a mismatch of skills and job opportunities when the pattern of demand and production changes. For example, a skilled welder may have worked for 25 years in shipbuilding but is made redundant at 50 when the industry contracts in the face of foreign competition. That worker may have to retrain in a new skill which is more in demand in today’s economy. But firms may be reluctant to take on and train older workers. Such workers become the victims of structural unemployment. Demand-deficient Unemployment. This refers to Keynesian unemployment, when aggregate demand falls and wages and prices have not yet adjusted to restore full employment. Aggregate demand is deficient because it is lower than full-employment aggregate demand. We saw that, until wages and prices have adjusted to their new long-run equilibrium level, a fall in aggregate demand will lead to lower output and employment. Some workers will want to work at the going real wage rate but will be unable to find jobs. Only in the longer run will wages and prices fall enough to boost the real money supply and lower interest rates to the extent required to restore aggregate demand to its full-employment level, and only then will demand-deficient unemployment be eliminated. Classical Unemployment. Since the classical model assumes that flexible wages and prices maintain the economy at full employment, classical economists had some difficulty explaining the high unemployment levels of the 1930s. Their diagnosis of the problem was partly that union power was maintaining the wage rate above its equilibrium level and preventing the required adjustment from occurring. Classical unemployment describes the unemployment created when the wage is deliberately maintained above the level at which the labour supply and labour demand schedules intersect. It can be caused either by the exercise of trade union power or by minimum wage legislation which enforces a wage in excess of the equilibrium wage rate. 9

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The modern analysis of unemployment takes the same types on unemployment but classifies them rather differently in order to highlight their behavioural implications and consequences for government policy. Modern analysis stresses the difference between voluntary and involuntary unemployment. III. Answer the following questions. 1. People of what age suffer from structural unemployment? 2. In what case will demand-deficient unemployment be overcome? 3. What is the modern analysis characteristic of as far as voluntary and involuntary unemployment is concerned? What does it want to stress? IV. Check up the pronunciation of the unfamiliar words in a dictionary and read Text 2 aloud. Types of Unemployment (Text 2) 1. Unemployment can be classified as frictional, structural, classical and demand-deficient. 2. Frictional unemployment is irreducible minimum level of unemployment. 3. It takes place in a dynamic society. 4. Physical or mental handicaps make some people almost unemployable. 5. Structural unemployment includes such people. 6.It also includes spending short spells in unemployment. 7. There may be a mismatch of skills and job opportunities. 8. It is possible when the pattern of demand and production changes. 9. Firms may be reluctant to take on and train older workers. 10. Such workers become the victims of structural unemployment. 11. Demand-deficient unemployment refers to Keynesian unemployment. 12. Aggregate demand may fall. 13. Wages and prices have not yet adjusted to restore full employment. 14. Aggregate demand is deficient. 15.It is lower than full-employment aggregate demand. 16. Some workers will want to work at the going real wage rate. 17. But they will be unable to find jobs. 18. Only in the longer run will demand-deficient unemployment be eliminated. 19. Classical unemployment describes the following models. 20. Unemployment is created when the wage is deliberately maintained above a certain level. 21. At this level the labour supply and labour demand 10

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schedules intersect. 22. It can be caused by the exercise of trade union power or by minimum wage legislation. 23. This enforces a wage in excess of the equilibrium wage rate. V. Write out from Text 2 equivalents for the following words and expressions. 1. безработица, классифицировать, фрикционный структурный, классический безработица вследствие недостаточного спроса; 2. несокращаемый; 3. динамический; 4. физические и умственные недостатки, не подлежащий приему на работу; 5. включать; 6. короткие промежутки; 7. несоответствие, умение, возможность получения работы; 8. возможный, модель, спрос и производство; 9. делающий что-то неохотно, принимать на работу, обучать; 10. жертва структурной безработицы; 11. безработица вследствие недостаточного спроса, относиться; 12. совокупный спрос, падать; 13. зарплаты и цены, приспосабливаться, восстанавливать; 14. дефицитный; 15. более низкий; 16. реальный уровень заработной платы; 17. не быть в состоянии; 18. с течением времени, устранять; 19. описывать, следующая модель; 20. создавать, умышленно поддерживать, определенный уровень; 21 обеспеченность рабочей силой, спрос на рабочую силу, график, пересекаться; 22. вызывать, использование, влияние профсоюзов, законодательство по минимальной зарплате; 23. усиливать, свыше равновесного размера зарплаты. VI.

Translate Text 2 into Russian (in writing)

VII. Translate the Russian version of Text 2 into English (orally) VIII. Make up meaningful phrases with the following. 1. unemployment, to be classified as; 2. frictional unemployment, to be, irreducible minimum level; 3. it, to take place; 4. physical or mental handicaps, to make; 5. frictional unemployment, to include; 6. it, also, to include, spending short spells; 7. there + to be, a mismatch, skills, opportunities; 8. it, to be possible, when, the pattern, to change; 9. firms, to be reluctant, to take on, to train; 10. such workers, to become victims; 11. demand-deficient unemployment, to refer; 12. aggregate demand, to fall; 13. wages and prices, not to ad11

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just, to restore; 14. aggregate demand, to be deficient; 15. it, to be lower than; 16. some workers, to want to work, wage rate; 17. they, to be unable, to find; 18. demand deficient unemployment, to be eliminated; 19. classical unemployment, to describe; 20. unemployment, to be created, when, the wage, to be maintained; 21. the labour supply and the labour demand schedules, to intersect; 22. it, to be caused, the exercise, power, legislation; 23. this, to enforce a wage, in excess of. IX. Replace the Russian words and expressions with their English equivalents. 1. Unemployment can be (классифицировать) as frictional, structural, classical and demand-deficient. 2. Frictional unemployment is irreducible minimum (уровень безработицы). 3. It (иметь место) in a dynamic society. 4. Physical or mental (недостатки) make some people (почти) unemployable. 5. Firms may be reluctant to take on and (обучать) older workers. 6. Such workers become (жертва) of structural unemployment. 7. Demanddeficient unemployment refers to Keynesian (безработица). 8. Aggregate demand may (упасть). 9. Wages and prices have not yet (приспосабливаться) to restore full employment. 10. Some workers will want to work at the going real (уровень зарплаты). 11. But they will be unable to find (рабочие места). 12. Classical unemployment (описывать) the following models. 13. Unemployment (создавать) when the wage is deliberately (поддерживать) above a certain level. 14. At this level the labour supply and labour demand schedules (пересекаться). X. Make the following sentences into questions. Example:

Unemployment can be classified as frictional, structural, classical and demand-deficient. How can unemployment be classified?

1. Frictional unemployment is irreducible minimum level of unemployment. Irreducible level of what is ……………? 12

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2. Physical and mental handicaps make some people almost unemployable. What make some people ……………? 3. Frictional unemployment includes such people. Whom does frictional unemployment ……………? 4. There may be a mismatch of skills and job opportunities. A mismatch of what may ……………? 5. It is possible when the pattern of demand and production changes. When is it ……………? 6. Only in the longer run will demand-deficient unemployment be eliminated. When will demand-deficient unemployment ……………? 7. Classical unemployment describes the following models. What does classical unemployment ……………? 8. It can be caused by the exercise of trade union power or by minimum wage legislation. How can it ……………? 9. This enforces a wage in excess of the equilibrium wage rate. In excess of what does this ……………? XI.

.Summarize in 10 sentences the contents of Text 2.

XII. Translate into Russian the third paragraph of Text 1. XIII. Show why the following statements are incorrect. 1. The unemployment rates for old workers and especially for young workers are well below the national average. 2. Supply-side economics does not aim to increase equilibrium employment and potential output, and to reduce the natural rate of unemployment by operating on incentives at a microeconomic level. 3. Keynesian unemployment is involuntary and therefore an advantage to private individuals who would prefer to be employed.

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ASSIGNMENT 3 THE PRIVATE COST OF UNEMPLOYMENT Pre-reading task I. Answer the questions. 1. What are the first three types of unemployment called? 2. Is the natural rate of unemployment determined by the equilibrium level of voluntary or involuntary unemployment? 3. How does the level of unemployment change when inflows to the pool of the unemployed exceed outflows? II.

Read Text 1. The Private Cost of Unemployment (Text 1) It is important to distinguish between voluntary and involuntary unem-

ployment. When individuals are voluntary unemployed, they reveal that they do better by being unemployed than by accepting the job offers that they face at the going wage rate. Under these circumstances the private cost of unemployment (the wage forgone by not working) is less than the private benefits for being unemployed. What are these benefits? First, the individual is entitled to transfer payments from the government. These are of two kinds. Workers who have previously contributed to the national insurance scheme are entitled to unemployment benefit for the first 12 months after they become unemployed. Thereafter they become entitled to supplementary benefit, the ultimate backstop in the British welfare state. Whereas most workers are entitled to unemployment benefit as of right, supplementary benefit is means-tested. Individuals have to make a full disclosure of their financial position before the benefit level is assessed, a procedure many people find invidious. For this reason, some people do not apply for supplementary benefit even though they would be entitled to it. Moreover, although the popular myth of “scroungers” living well off the welfare state is not com14

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pletely without foundation, in practice many people on supplementary benefit are among the poorest people in the country. Are there any other benefits to be had from being unemployed? First, there is the value of leisure. By refusing a job, some people are revealing that the extra leisure is worth more to them than the extra disposable income if they took a job. Second, some people expect to get a better job after a temporary spell of unemployment. These future benefits must be set against the current cost of lower disposable income. When people are involuntarily unemployed, the picture changes. Involuntary unemployment means that people would like to work at the going wage but cannot find a job because there is excess labour supply at the existing wage rate. These people are worse off as a result of being unemployed. The distinction between voluntary and involuntary unemployment is important because it may affect our value judgement about how much attention should be paid to the unemployment problem. When unemployment is involuntary, more people are suffering and the case for helping them is stronger. III.

Answer the questions.

1. How does the type of unemployment (voluntary or involuntary) influence the life of people? 2. What can and should the government be doing? IV.

Check up the pronunciation of unfamiliar words in a dictionary and read Text 2 aloud. The Private Cost of Unemployment (Text 2) 1. It is important to distinguish between voluntary and involuntary unem-

ployment. 2. Individuals may be voluntarily unemployed. 3. They reveal the following. 4. They do better by being unemployed than by accepting the job offers. 5. The private cost of unemployment is the wage forgone by not working. 6. It is less than the private benefits for being unemployed. 7. The benefits are the following. 8. The individual is entitled to transfer payments from the government. 9. Most workers are entitled to unemployment benefit as of right. 10. Supplementary benefit is means15

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tested. 11. Individuals have to make a full disclosure of the previous financial position. 12. Many people find this procedure invidious. 13. For this reason, some people do not apply for supplementary benefit. 14. In practice many people on supplementary benefit are among the poorest people. 15. There are some other benefits to be had from being unemployed. 16. First, there is the value of leisure. 17. Second, some people expect to get a better job after a temporary spell of unemployment. 18. Involuntarily unemployed changes the picture. 19. Involuntary unemployment means the following. 20. People would like to work at the going wage but cannot find a job. 21.The fact is that here is excess labour supply at the existing wage rate. 22. These people are worse off as a result of being unemployed. 23. When unemployment is involuntary, more people are suffering. V.

Write out from Text 2 equivalents for the following words and expressions.

1. различать, добровольная и недобровольная безработица; 2. индивид, добровольно безработный; 3. обнаруживать; 4. жить лучше, принимая предложения по работе; 5. личные издержки по безработице; зарплата, принятая заранее в случае отсутствия работы; 6. быть меньше, чем льготы по безработице; 7. следующие (льготы); 8. иметь право на что-либо, трансфертные платежи; 9. пособие по безработице, по закону; 10. дополнительное пособие, подвергать проверке нуждаемости; 11. полностью раскрывать, предыдущий; 12. процедура, оскорбляющая несправедливостью; 13. обращаться; 14. на практике, среди; 15. пособия, выплачиваемые по безработице; 16. во-первых, ценность свободного времени; 17. во-вторых, ожидать, временный период безработицы; 18. изменять; 19. означать следующее; 20. работать при принятой заработной плате, найти работу; 21. избыточное предложение рабочей силы, существующий размер зарплаты; 22. быть в худшем положении, в результате безработицы; 23. страдать. VI.

Translate Text 2 into Russian (in writing)

VII. Translate the Russian version of Text 2 into English (orally) VIII. Make up meaningful phrases with the following. 16

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1. it, to be important, to distinguish; 2. individuals, may be; 3. they, to reveal; 4. they, to do better, being unemployed, than, by accepting; 5. they, to face, at the going wage rate; 6. the private cost, to be, the wage forgone; 7. it, to be less, private benefits; 8. the benefits, to be; 9. the individual, to be entitled; 10. most workers, to be entitled, as of right; 11. supplementary benefit, to be; 12. individuals, to have to make, financial position; 13. many people find, invidious; 14. some people, not to apply; 15. many people, to be among; 16. there + to be, some other benefits, to be had; 17. there + to be, the value for leisure; 18. some people, to expect, to get; 19. involuntary unemployment, to change; 20. involuntary unemployment, to mean; 21. people, to like, to work; 22. there + to be, excess labour supply; 23. these people, to be worse off, as a result; 24. more people, to suffer. IX.

Replace the Russian words and expressions with their English equivalents.

1. It is important (различать) between voluntary and involuntary unemployment. 2. Individuals do better by being unemployed than (принимая) the job offers. 3. The private cost of unemployment is (заработная плата) forgone by not working. 4. It is (меньше) than the private benefits for being unemployed. 5. The individual (давать право) to transfer payments from the government. 6. Most workers are entitled to unemployment benefit (по закону). 7. (Дополнительный) benefit is means-tested. 8. Individuals have to make a full disclosure of the (предыдущий) financial position. 9. Many people do not (обращаться) for supplementary benefit. 10. (На практике) many people on supplementary benefit are among the poorest people. 11. Involuntarily unemployed (изменять) the picture. 12. People would like to work at (существующая зарплата) but cannot find a job. 13. When unemployment is involuntary, more people (страдать). X.

Make the following sentences into questions.

Example:

It is important to distinguish between voluntary and involuntary unemployment. What is it necessary ……………? 17

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1. Individuals do better by being voluntary unemployed than by accepting the job offers. How do the individuals ……………? 2. They face the job offers at the going wage rate. What wage rate do they ……………? 3. The private cost of unemployment is the wage forgone by not working. What wage is ……………? 4. It is less than the private benefits for being unemployed. Is it less or more ……………? 5. The individual is entitled to transfer payments from the government. What is the individual ……………? 6. Most workers are entitled to unemployment benefit as a right. How are most workers ……………? 7. Many people find this procedure invidious. Do many people or few individuals ……………? 8. These people are worse off as a result of being unemployed. Why are these people ……………? 9. When unemployment is involuntary more people are suffering. When are more people ……………? XI.

Summarize in 10 sentences the contents of Text 2.

XII. Translate into Russian the third paragraph of Text 1. XIII. Show why the following statements are incorrect. 1. Society may not care about human misery inflicted by involuntary unemployment. 2. High unemployment does not mean that economy is throwing away output by failing to put its people to work.

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ASSIGNMENT 4 THE SOCIAL COST OF UNEMPLOYMENT Pre-reading task I.

Answer the questions. 1. Why does society receive no direct return from the payment of unemployment benefit when people are voluntarily unemployed? 2. Explain why involuntary unemployment is a disadvantage to private individuals.

II.

Read Text 1. The Social Cost of Unemployment (Text 1) Again we distinguish between voluntary and involuntary unemployment.

When unemployment is voluntary, individuals reveal that they prefer to be unemployed. Does this mean that unemployment is also good for society as a whole? There is one very obvious discrepancy between individual benefit and social benefit. For an individual, unemployment and supplementary benefit are part of the benefits of being unemployed. But these transfer payments give no corresponding benefit to society as a whole. They may ease the collective conscience about poverty and income inequality, but they are not payments in exchange for the supply of any goods or services that other members of society may consume. To this extent, the value judgement that we ought to support the unemployed inevitably entails a cost in allocative inefficiency. It encourages too many people to be voluntarily unemployed. However, this does not mean that society should go to the opposite extreme and try to eliminate voluntary unemployment completely. First, society is perfectly entitled to adopt the value judgement that it will maintain a reasonable living standard for the unemployed, whatever the cost in resource misallocation. Second, even in terms of allocative efficiency, the efficient level of voluntary unemployment is certainly about zero. 19

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In a changing economy, it is important to match up the right people to the right jobs. Getting this match right allows society as a whole to produce more output. Freezing the existing pattern of employment in a changing economy will eventually lead to a mismatch of people and jobs. The flow through the pool of unemployment is one of the mechanisms through which society reallocates people to more suitable jobs and increases total output in the long run. If unemployment benefits make this transition smoother, society as a whole may gain. Our earlier discussion of the duration of unemployment showed that, during the postwar years of low unemployment, a high percentage of the unemployed were quickly re-employed. In the 1980s many more of the unemployed were unemployed in the long term. It can no longer be maintained that most of our unemployment is the inevitable consequence of reallocation of the workforce to more appropriate jobs. Involuntary or Keynesian unemployment has an even higher social cost. Since the economy is producing below capacity, it is literally throwing away output that could have been made by putting these people to work. Moreover, since Keynesian unemployment is involuntary, there may be a presumption that it entails more human and psychological suffering than voluntary unemployment. Although this is hard to quantify, it should also be counted as part of the social cost of unemployment. III. Answer the questions. 1. In what case do individuals choose being unemployed? 2. Unemployment in what country does the author dwell upon? IV. Check up the pronunciation of unfamiliar words in a dictionary and read Text 2 aloud. The Social Cost of Unemployment (Text 2) 1. Again we distinguish between voluntary and involuntary unemployment. 2. There is one very obvious discrepancy between individual benefit and social benefit. 3. For an individual, unemployment and supplementary benefit 20

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are part of certain benefits. 4. They are the benefits of being unemployed. 5. But these transfer payments give no corresponding benefit to society as a whole. 6. They are not payments in exchange for the supply of any goods and services. 7. Other members of society might consume them. 8. This entails a cost in allocative inefficiency. 9. It encourages too many people to be voluntarily unemployed. 10. But society should not go to the opposite extreme. 11. It should not try to eliminate voluntary unemployment completely. 12. Society is entitled to adopt the value judgement. 13. It will maintain a reasonable living standard for the unemployed. 14. Second, the efficient level of voluntary unemployment is about zero. 15. It is important to match up the right people to the right jobs. 16. This allows society as a whole to produce more output. 17. Freezing employment will lead to a mismatch of people and jobs. 18. Thanks to unemployment society reallocates people to more suitable jobs. 19. It increases total output in the long run. 20. Unemployment benefits make this transition smoother. V.

Write out from Text 2 equivalents for the following words and expressions:

1. различать; 2. очевидное различие; 3. дополнительный, быть частью; 4. пособие по безработице; 5. выплата, соответствующая выгода; 6. обмен, предложение; 7. члены общества, потреблять; 8. вызывать, неэффективность, порождаемая распределением ресурсов; 9. содействовать, добровольно; 10. противоположная крайность; 11. устранять, полностью; 12. иметь право, принять, суждение; 13. поддерживать, разумный уровень жизни; 14. эффективный уровень, нуль; 15. сочетать; 16. позволять, производить, продукция; 17. замораживать, занятость, несоответствие; 18. благодаря, перераспределять, подходящий; 19. увеличивать, валовой выпуск, в конечном итоге; 20. переход, более плавный. VI.

Translate Text 2 into English (in writing).

VII. Translate the Russian version of Text 2 into English (orally) VIII. Make up meaningful phrases with the following: 1. we, to distinguish between; 2. there + to be, one discrepancy, between; 3. unemployment, supplementary benefit, to be part; 4. they, to be the benefits of; 5. these 21

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transfer payments, to give no corresponding benefit; 6. they, not to be payments, exchange, the supply; 7. other members of society, might consume; 8. this, to entail a cost; 9. it, to encourage too many people, to be; 10. but, society, should not go; 11. it, not to try, to eliminate; 12. society, to be entitled, to adopt; 13. it, to maintain, a reasonable living standard; 14. the efficient level, voluntary unemployment, to be; 15. it, to be important, to match up; 16. this, to allow, society, to produce; 17. freezing employment, to lead, a mismatch; 18. society, to reallocate people; 19. it, to increase, output; 20. unemployment benefits, to make. IX. Replace the Russian words and expressions with their English equivalents. 1. There is one very (очевидный) discrepancy between individual benefit and social benefit. 2. (Для индивида), unemployment and supplementary benefit are part of certain benefits. 3. They are the benefits (быть безработным). 4. But these transfer payments give no corresponding benefit (общество в целом). 5. This entails a cost in allocative (неэффективность). 6. But society should not go to the opposite (крайность). 7. Society is entitled (принять) the value judgement. 8. It will (поддерживать) a reasonable living standard for the unemployed. 9. It is important to match up the right people to the right (рабочее место). 10.(Благодаря) unemployment society reallocates people to more suitable jobs. X.

Make the following sentences into questions.

Example:

There is one very obvious discrepancy between individual benefit and social benefit. What one very obvious discrepancy is there?

1.

Again we distinguish between voluntary and involuntary unemployment. What do we ………………..?

2.

For an individual, unemployment and supplementary benefit are part of certain benefits. What are part of certain …………………..…...? 22

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3.

But these transfer payments give no corresponding benefit to society as a whole. What don’t these transfer payments ………………..?

4.

They are not payments in exchange for the supply of any goods and services. What aren’t payments ………………..?

5.

Other members of society might consume them. Who might …………………..?

6.

It should not try to eliminate voluntary unemployment completely. How shouldn’t it try to eliminate ……………..?

7.

Thank to unemployment society reallocates people to more suitable jobs. Thanks to what does society ………………?

XI.

Summarize in 10 sentences the contents of Text 2.

XII.

Translate into Russian the second paragraph of Text 1 (in writing).

XIII. In several sentences describe what has been happening to unemployment in Japan and Sweden. The following words and expressions will help you. 1. There + to be, different forces at work, different countries. 2. In Japan, workers, to be rarely fired and seldom quit. 3. There + to be, an implicit agreement, between firms and workers. 4. The workers, to have lifetime jobs, provided, they, to be male. 5. Women, may lose jobs. 6. They, to tend, not to become unemployed, but, rather, to move out of labour force. 7. in Sweden, it, to be, extremely expensive, to sack a worker. 8. Firms, to have to pay, large redundancy payments. 9. They, to go to some lengths, to avoid, to fire workers. 10. The government, deliberately, to create, public sector jobs, in order, to hold down unemployment.

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Учебное издание

UNEMPLOYMENT Учебно-методическое пособие

Составитель Агафонова Ирина Григорьевна

Подписано в печать 27.03.2009. Формат 60×84/16. Усл. печ. л. 1,4. Тираж 100 экз. Заказ 504. Издательско-полиграфический центр Воронежского государственного университета. 394000, г. Воронеж, пл. им. Ленина, 10. Тел. 208-298, 598-026 (факс) http://www.ppc.vsu.ru; e-mail: [email protected] Отпечатано в типографии Издательско-полиграфического центра Воронежского государственного университета. 394000, г. Воронеж, ул. Пушкинская, 3. Тел. 204-133