French Riots- Are Labor Policies Part of the Problem 2301

French Riots- Are Labor Policies Part of the Problem 2301 -...

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Unformatted text preview: Aplia Inc.: Assignments . Page 1 of 1 French Riots — Are Labor Policies Part of the Problem? Contents Due Friday 03.28.08 11:00 PM | Grade: The national unemployment rate in France is 10%. Yet, the national average tells us little about the labor market experience among different demographic groups in France. The rioters tend to be young French-b: Muslims of Arab or African descent. Employment statistics among French youth and Muslim minorities are telling. as?” 1.1. According to the commentary, the youth unemployment rate in France is: A. 43% {is B. 21% o c. 15% it”: D. 36% From the commentary: "Youth unemployment Aplia Inc.: Assignments Page 1 of 1 French Riots - Are Labor Policies Part of the Problem? Contents Due Friday 03.28.08 11:00 PM i Grade: as? 2. Most analysts agree that discrimination plays a significant role in keeping young French Muslims at the margins of French society. The commentary claims there is strong anecdotal evidence (evidence based casual observation) of racial discrimination by employers. According to the article, France's interior minister, , wants to implement positive discrimination policies (affirmative action) to address excessive minority unemployment. - C? A. Gerard Depardieu Cf B. Dominique de Villepin {‘3 C. Nicolas Sarkozy if} D. Jean—Marie Le Pen From the commentary: "Nicolas Sarkozy, the interior minister, merits credit for raising the issue of economic marginalisation. But his solution u positive discrimination —— is a decidedly second—best pian. Aplia Inc.: Assignments Page 1 of 1 French Riots — Are Labor Policies Part of the Problem? Contents Due Friday 03.28.08 11:00 PM | Grade: er“ 3. The Financial Times editors argue that France's labor market system, .while not directly causing the riots, certainly exacerbates problems in the impoverished suburbs. According to the commentary, which of the foilowing aspects of French labor policy marginalize young, less qualified workers? I. Minimum wages II. Payroll taxes III. Workplace safety standards IV. Firing restrictions V. Unionization C! A. II and IV only if} a. I, II, III, and IV only C. IV oniy D. I, II, III, IV, and V {3 E. II, III, and v only F. I, II, and IV only it" G. Ionly The commentary claims that minimum wages, payroll taxes, and firing restrictions prevent many of France's young, inexperienced would—be workers from entering the ranks of the employed. Aplia 1110.: Assignments Page 1 of 2 Welcome, Econ 2301 Spring 2008 Houston Community College DE French Riots - Are Labor PoIiCies Part of the Problem? Contents Due Friday 03.28.08 11:00 PM | Grade: Unemployment analysis is an excellent example of the ties between _macroeconomics and microeconomics unemployment at the macro level, but: micro forces partly determine this macro aggregate. Suppose the graph in the calculator below represents the market for unskilled labor in France. Many of the inexperienced youths involved in the recent rioting would begin their working careers in this labor market. calculator to answer the questions below. WAGE [Eu nus per hour] 15 l l l Wage :1 { {Euros per new} mm... s 3. Labor Demanded i IThousa niis ofworlcersi .4 M Labor Supplied [Thousands oiwerkers] Surplus la bar [Thousands oi workers] mares? Junie int. no rights reserve-ii. {A Payroll tax {Ferment 0% earnings] ...m........._.... (Seminars: 2.1%? i I [l 200 M10 000 E1033 100i] OUAH‘ElWlTheusands aiwarkers] Suppose the minimum wage in France is 10 euros per hour. Let's define an unemployed worker as one that is willing to work at the prevailing wage. In this case, the r wage is binding because it lies above the market wage. That is, the minimum wage is the prevailing wage, , its? 4.1. If the wage is not allowed to fall below 10 euros per hour, how many unskilled workers are unemplo it: A. 253,000 B. 529,000 G c. 145,000 D. 347,000 At a minimum wage of 10 euros per hour, 708,000 unskilled workers are willing to work, but French hire only 361,000 workers. The surplus iabor represents unemployment; 347,000 unskilled workers unable to find work at this minimum wage. You can see the number of unemployed workers by adjusting the horizontal green line to a wage of euros and reading the number in the Surpius Labor box. Aplia Inc; Assignments 7 Page 1 of 2 Econ 2301 Spring 2008 Houston Community College DE French Riots - Are Labor Policies Part of the Problem? Contents Due Friday 03.28.08 11:00 PM ] Grade: Unemployment analysis is an excellent example of the ties between macroeconomics and mlcroeconomics unemployment at the macro level, but micro forces partly determine this macro aggregate. Suppose the graph in the calculator below represents the market for unskilled labor in France. Many of the inexperienced youths involved in the recent rioting wouid begin their working careers in this labor market. caiculator to answer the questions below. WAGfi [Eu ms per hour] ‘15 Wage {5 E l i g Euros per Etoer mum”-.. 3‘ 3 Labor Demanded iThsusands of workers} Labor Suppiied ITheusands 0% workers] i i i i i E E12 E E l Surplus labor é ~ [Thousands of workers] DE Paymth tax {Percent 0? earnings] .30 6000200? 52025; 500, at: rights reserves. a“ :5 t: "97: 21.2 g n 200 2.00 500 000 1.000 E 000070? news-anus of- workers] Suppose the minimum wage in France is 10 euros per hour. Let's define an unemployed worker as one that is willing to work at the prevailing wage. In this case, the r wage is binding because it iies above the market wage. That is, the minimum wage is the prevailing wage, sf 4.2. The labor force is simply the number of employed workers pius the number of unemployed workers. minimum wage of 10 euros per hour, the size of the unskilled labor force is: A. 654,000 B. 500,000 0. 361,000 4% D. 708,000 At a minimum wage of 10 euros per hour, firms hire 361,000 workers and surplus labor is 347,000 workers. Therefore, the size of the unskilled labor force is equal to the number of employed workers (361,000) plus the number of unemployed workers (347,000), or 708,000 workers. Contents Due Friday 03.28.08 11:00 PM [ Grade: Aplia 1110.: Assignments Page 1 of 2 Welcome, Econ 2301 Spring 2008 Houston Community College DE French Riots — Are Labor Policies Part of the Problem? Contents Due Friday 03.28.08 11:00 PM | Grade: Unemployment analysis is an excellent example of theties between macroeconomics and mlcroeconomics unemployment at the macro level, but micro forces partly determine this macro aggregate. Suppose the graph in the calculator below represents the market for unskilled labor in France. Many of the inexperienced youths involved in the recent rioting would begin their working careers in this labor market. calculator to answer the questions below. fiaicuiailor 2.1%} 30102000? initial inc. as rights- reserreet. l l l l i l l i l WAGE IE1] res per hour] 15 l g Wage {Euros per hour} 5 12 Labor Demanded Lei: or Su ppiled {Theme-nos of workers} {Thousands efworicers] Surplus la bar 9 [Thousands of workers] 15 i Payroll tax in i [i’ercent e5 earnings] mm m «3 l i D 2110 £100 £130 BBQ 1000 i QUANTITY [Thousands of workers] Suppose the minimum wage in France is 10 euros per hour. Let's define an unemployed worker as one that is willing to work at the prevailing wage. In this case, the r wage is binding because it lies above the market wage. That is, the minimum wage is the prevailing wage. at” 4.3. {sz (3:: {‘2 {3 Recall the calculation for the unemployment rate: Unemployment Rate = (Unemployed / Labor Force) At a minimum wage of 10 euros per hour, what is the unemployment rate among unskilled workers? A. 15% B. 49% C. 63% D. 34% At a minimum wage of 10 euros per hour, the unemployment rate among unskilled workers is 49% (361,000 workers / 708,000 workers). ' Aplia 1110.: Assignments Page 1 of 2 Welcome, .Econ 2301 Spring 2008 Houston Community College DE . French Riots - Are Labor Policies Part of the Problem? Contents Due Friday 03.28.08 11:00 PM | Grade: Unemployment analysis is an excelient example of the ties between macroeconomics and microeconomics unemployment at the macro level, but micro forces partly determine this macro aggregate. Suppose the graph in the calculator below represents the market for unskilled labor in France. Many of the inexperienced youths involved in the recent rioting would begin their working careers in this labor market. calculator to answer the questions below. WAGE lEu res per hour] ‘15 V: : Wage 1 {Euros per hear] ‘12 Labor Supplied g {Thousands of wericers] {Thousands ofwerkers] Surpiéus labor '[Timusands of workers] 3 i Labor Demanded i i i 5 Payroll tax {Percent of earnéngs} meantime: $3.113 2062—2339?! siréin rm. Ail tightsmset‘ymt. l} 200 400 6110 Elm] 1i] no GUANTIW IThousands oiwariters] Suppose the minimum wage in France is 10 euros per hour. Let's define an unempEoyed worker as one that is willing to work at the prevailing wage. In this case, the r wage is binding because it lies above the market wage. That is, the minimum wage is the prevailing wage. «g7 4.4. As indicated in the calculator, the initial payroll tax is 40%. A payroll tax is a tax on the earnings tha employer pays to an empioyee. The commentary suggests that France can reduce unemployment ar young, inexperienced workers by cutting payroll taxes. Suppose France cuts the payroll tax from 40% to 30%. Assuming the 10 euro minimum wage remai force, what is the unemployment rate among unskilled workers after the payroll, tax cut? #5 A. 24% B. 18%: c. 10% v D. 41% The lower payroil tax shifts the iabor demand curve to the right. You can see this by entering 30 in t Payroll Tax field in the cafculator. - When firms pay fewer taxes per worker, they effectiveiy pay a lower wage. For example, if a worker paid the minimum wage of 10 euros per hour, this means the firm is actuaily paying 14 euros per hc Aplia Inc.: Assignments ' Page 1 of 1 French Riots — Are Labor Policies Part of the Problem? Contents Due Friday 03.28.08 11:00 PM | Grade: 1. In the unskilled labor market, workers are often young and inexperienced. Having little past performan: to judge potential employees on, many firms hire workers for a trial period with the understanding that th worker will be dismissed for sub standard performance. The commentators think France should reduce its job protection rights. Job protection rights make it relatively difficult and expensive for French firms to fire workers. How might stringent job protection measures affect the demand for unskilled labor? 2. French officials defend job protection measures, arguing that job security makes workers happier, and happier workers are more productive workers. How might job protection measures affect worker productivity? 3. Suppose racial stereotypes mean that some employers don‘t trust minority workers. Because it is difficr to fire workers in France, such employers may not hire minority workers at all, thereby entrenching racial discrmination. Would eliminating these job protections measures ease racial discrimination? Contents . Due Friday 03.28.08 11:00 PM 3 Grade ...
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This note was uploaded on 10/02/2010 for the course INTB 3353 taught by Professor Prodan during the Spring '10 term at University of Houston-Victoria.

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French Riots- Are Labor Policies Part of the Problem 2301 -...

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