Unemployment Videos

Song 1: Mockingbird - Eminem
https://www.youtube.com/watch?v=OthLwh5Gtvw

Song 2: Brother, Can You Spare a Dime? - Bing Crosby, Yip Harburg, and Jay Gorney
https://www.youtube.com/watch?v=eih67rlGNhU

Song 3: If We Make It Through December - Merle Haggard
https://www.youtube.com/watch?v=Z-IJxTd8dCo

My primary song choice for this blog is Eminem's "Mockingbird". Mockingbird has been one of my favorite songs since my childhood, but after recently rereading the lyrics, I only recently recognized the references it has to unemployment. Low unemployment is perhaps the most important macroeconomic goal, since a long period of high unemployment leads to several dire consequences, other than those that are just purely based on economic theory. There are few things more soul-crushing than an utter sense of worthlessness, which stems frequently from feeling like one has no contribution to make to society or anything that they've achieved in life. Rampant unemployment can easily cause previously well-off families to lose all their savings, or their standard of life, and unemployment that lasts for too long often forces families to sell off houses, cars, and other absolutely essential requirements for functioning in society. At that point, even a recovery period makes it impossible to get a job or comeback from the devastation, and this leads to higher suicide and crime rates.

Some of the lyrics in Mockingbird that I felt had a connection to unemployment were "I'm trying to give you the life that I never had", "Daddy's always on the move", but this entire passage was very heartbreaking and significantly referenced the struggles of unemployment:

"I remember back one year when daddy had no money
Mommy wrapped the Christmas presents up
And stuck 'em under the tree and said some of 'em were from me
Cause daddy couldn't buy 'em
I'll never forget that Christmas I sat up the whole night crying
Cause daddy felt like a bum, see daddy had a job
But his job was to keep the food on the table for you and mom."

Unemployment Rate in Thailand

How does the government define and calculate the unemployment rate?

The unemployment rate is typically defined as the percentage of the active working force currently out of a job and seeking one. The Thai government essentially follows this definition, and their unemployment statistics are calculated by the Labor Force Survey (LFS).

Give some statistics on the unemployment rates for different regions, age groups, ethnic groups and gender in Thailand.

While Thailand has a total population of 67 million, it's labor force is roughly 40 million. Thailand actually has the FOURTH lowest unemployment rates in the world at 1%. Here is a breakdown by different categories, as well as a chart depicting Thailand's unemployment rates from 1986:

agriculture: 38.2%

industry: 13.6%

services: 48.2%

Female Unemployment rate: 0.60%

Male Unemployment rate: 0.60%

North: 0.48%

South: 0.53%

Central: 0.85% 

Bangkok: 0.26%

Northeast: 0.93%

How extensive are the labour market regulations in Thailand (e.g. minimum wage, job security, safety standards, length of workday/week/month and paid holidays)

Thailand is a developing nation, and there is still a lot of child labor that goes on in low income regions, especially industrial, factory-abundant areas. Despite it's relative lack of prosperity, however, Thailand has fairly generous labor standards. There is compensation for sick, pregnant, and young workers, and children under the age of 15 are not allowed to work. A minimum wage exists, around 300 baht (~10 USD) per day, and work hours cannot officially exceed 8 per day.

What does the government do to reduce the level of unemployment? Can you identify which policies are interventionist or market oriented?

The government has enacted various policies since the late 1900's to combat unemployment in Thailand. Most significantly, the Thai government has started several market-based programs to increase the quality and quantity of their workforce, providing cheap, accessible education in low income regions and ensuring quality public education for all. They've attempted to subsidize struggling farmers with interventionist policies like the infamous "rice scheme". Another example is using the military to improve the quality of infrastructure throughout Thailand (market based).

Business Cycle

This image shows us an excellent example of a typical business cycle. As time goes on, the level of output in an economy fluctuates between two constantly evolving extremes: the boom and the bust. While the oscillation is constant, the economy (in most cases) is still ever growing. Even if there's a temporary recession (the downward decrease in growth from a boom),  the economy eventually recovers (period of increased economic growth from a bust), and reaches an even higher boom. As this cycle goes on, with ever increasing peaks, the long term trendline is one of constant growth, usually slightly below potential output (unless the economy is undergoing a phenomenon like an inflationary gap).

Circular Flow of Income

As we can see from the above diagram, the flow of income throughout an economy travels through four primary routes. Households and individuals supply businesses with the factors of production to create goods and services, and in return those businesses supply the goods and services. To pay for these goods and services, consumers use money and spend money; this expenditure is used to fund the businesses' production costs. To repay individuals and households for their labor and factors of production, businesses provide income in the form of wages, rent, profit, and interest in the fourth and final route. And thus, income flows from the households and businesses in an economy in a complete, repetitive cycle.

Tragedy of the Commons

The article "Can Free Market Economies Boost Amazonian Land Rights?" describes the issues that indigenous communities are having with commercial fishermen who steal their food. Since the resources have no designated owner, people are free to take as much as they want; the "Tragedy of the Commons" describes this phenomenon, where it is both rational to take as much of the resource as you want and irrational to drain the source of food. To solve this issue, Hernando de Soto suggests giving property rights to the indigenous people, but some people worry that private ownership would make them liable to being bought out by big businesses.

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Another example: Indonesian Reef Fish

This article talks about another common access resource: Indonesia's reef fish, which are quickly becoming less and less abundant because of the high demand from South China and Hong Kong, at a rate of 30% per year. This is irrational, since the fishermen's usage of unconventional farming methods is setting them up for starvation in the future. Organizations are trying to educate fishermen, but it seems without proper government manage or property rights, the Indonesian reef fish is doomed for extinction.

Examples of Government Intervention

1) Indirect Taxes: "Indirect Tax Becomes Levy of Choice for Governments"

http://www.ft.com/intl/cms/s/0/d1957616-cdf4-11e3-9dfd-00144feabdc0.html#axzz3FZdi8aOW

In this article, Houlder discusses the rise in indirect taxes across the world, with over 13 countries increasing their indirect taxes with none cutting them. It seems that governments around the world are finding them one of the most efficient ways to increase revenue, for reasons like low cost of collection. This is in line with a trend of aiming or more transparency with taxes. However, with a variety of amendments made to the laws regarding income tax, the process of recording it is becoming increasingly complex.

2) Subsidies: "UK Cleared to Heavily Subsidize $39B Nuclear Plant"

http://abcnews.go.com/International/wireStory/uk-cleared-heavily-subsidize-39b-nuclear-plant-26038633

This article describes the EU's approval for Britain's bid to subsidize a new nuclear plant, despite arguments from people questioning it's hefty price tag. To make this decision, the EU ensured the subsidy wouldn't distort the energy market (a problem with subsidies is that they often negatively impact the product of any competitors). This subsidy will ensure the investors of the plant will break even, especially since the past few plants have all failed financially leading analysts to claim their usage is impossible without subsidies from the government. The only problem is environmentalists are furious that billions of taxpayer dollars are being used to fund an arguably nonrenewable, "dirty" source of energy.

3) Price Controls: "Panama's President-Elects Plans Price Controls on Basic Foods"

http://articles.chicagotribune.com/2014-05-06/news/sns-rt-us-panama-election-20140424_1_price-controls-panama-city-basic-foods

In order to lower the costs of basic "basket food necessities" (such as rice, cheese, and meat) Panama's new President is planning on applying price controls to 22 different food items, a policy change that appears to be specifically aimed at the outgoing President, who was a supermarket tycoon. It is estimated that these price controls can save the people of Panama $600 million! These moves are being made to combat the leaps in prices that food and drinks are making, contrary to inflation and the rest of the market (due to Panama's informal economy).