Chapter

27
The Labor Market,
Unemployment,
and Inflation

Prepared by:

Fernando & Yvonn Quijano

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair
CHAPTER 27: The Labor Market, Unemployment,

The Labor Market,

Unemployment,
and Inflation
27
Chapter Outline
The Labor Market: Basic Concepts
The Classical View of the Labor Market
The Classical Labor Market and the Aggregate
Supply Curve
and Inflation

The Unemployment Rate and the Classical View

Explaining the Existence of Unemployment
Sticky Wages
Efficiency Wage Theory
Imperfect Information
Minimum Wage Laws
An Open Question
The Short-Run Relationship Between the
Unemployment Rate and Inflation
The Phillips Curve: A Historical Perspective
Aggregate Supply and Aggregate Demand Analysis
and the Phillips Curve
Expectations and the Phillips Curve
Is There a Short-Run Trade-Off Between Inflation
and Unemployment?
The Long-Run Aggregate Supply Curve,
Potential GDP, and the Natural Rate of
Unemployment
The Nonaccelerating Inflation Rate of
Unemployment (NAIRU)
Looking Ahead
© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 2 of 31
 Penduduk dan Tenaga Kerja
CHAPTER 27: The Labor Market, Unemployment,

Batasan Umur:
15 tahun ke atas Angkatan
Kerja
Tenaga Kerja
and Inflation

Bukan
Angkatan
Penduduk Kerja

Bukan Tenaga
Kerja

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair
 Berdasarkan Batas Kerja:
Angkatan Kerja dan Bukan Angkatan Kerja
CHAPTER 27: The Labor Market, Unemployment,

Bekerja

Angkatan Kerja
Menganggur
dan Mencari
Pekerjaan
and Inflation

Tenaga Kerja
Bersekolah

Bukan Mengurus
Angkatan Kerja Rumah Tangga

Golongan Lain

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair
CHAPTER 27: The Labor Market, Unemployment,

Golongan Lain

Tidak bekerja tapi

Hidupnya tergantung
memperoleh
pada orang lain:
pendapatan:
and Inflation

• Pensiunan, bunga • Lanjut usia, orang

deposito, deviden, sakit, penyandang
sewa atas hak milik. cacat, narapidana.

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair
 Konsep Ketenagakerjaan
CHAPTER 27: The Labor Market, Unemployment,

Angkatan Kerja (Labour Force) adalah jumlah orang yang bekerja

(employed) ditambah dengan orang yang menganggur (unemployed
/ jobless) tetapi sedang mencari pekerjaan (looking for a job).

Angkatan Kerja = Bekerja + Penganggur

and Inflation

TPAK = Tingkat Partisipasi Angkatan Kerja

Penduduk Usia Kerja = 15 – 64 tahun.

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair
 THE LABOR MARKET: BASIC CONCEPTS
CHAPTER 27: The Labor Market, Unemployment,

Angkatan kerja (Labor Force) adalah jumlah yang

bekerja ditambah pengangguran :

LF = E + U
and Inflation

unemployment rate Jumlah orang yang

menganggur sebagai persentase dari
angkatan kerja.

Unemployment rate = U/LF

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 7 of 31
 THE LABOR MARKET: BASIC CONCEPTS
CHAPTER 27: The Labor Market, Unemployment,

frictional unemployment Porsi

pengangguran yang disebabkan oleh
mekanisme kerja normal pasar tenaga
kerja; digunakan untuk menunjukkan
and Inflation

masalah ketidak cocokan pekerjaan dg

keterampilan .

structural unemployment Porsi

pengangguran yang disebabkan oleh
perubahan dalam struktur ekonomi yang
mengakibatkan hilangnya pekerjaan
secara signifikan di industri tertentu.

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 8 of 31
 THE LABOR MARKET: BASIC CONCEPTS
CHAPTER 27: The Labor Market, Unemployment,

cyclical unemployment Peningkatan

pengangguran yang terjadi selama
resesi dan depresi.
and Inflation

Lapangan kerj acenderung turun ketika output agregat turun dan naik ketika output agregat
naik.

Penurunan per mintaan tenaga kerja tidak

selalu berarti bahwa pengangguran akan
meningkat.

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 9 of 31
 THE CLASSICAL VIEW OF THE LABOR
MARKET
CHAPTER 27: The Labor Market, Unemployment,
and Inflation

FIGURE 14.1 The Classical Labor Market

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 10 of 31
 THE CLASSICAL VIEW OF THE LABOR
MARKET
CHAPTER 27: The Labor Market, Unemployment,

labor supply curve A graph that

illustrates the amount of labor that
households want to supply at each given
wage rate.
and Inflation

labor demand curve A graph that

illustrates the amount of labor that firms
want to employ at each given wage rate.

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 11 of 31
 THE CLASSICAL VIEW OF THE LABOR
MARKET
CHAPTER 27: The Labor Market, Unemployment,

THE CLASSICAL LABOR MARKET AND THE

AGGREGATE SUPPLY CURVE

Gagasan klasik bahwa upah menyesuaikan diri dengan

pasar tenaga kerja yang konsisten dengan pandangan
bahwa upah merespons dengan cepat terhadap
and Inflation

perubahan harga. Ini berarti bahwa kurva AS adalah

vertikal.

Ketika kurva AS vertikal, kebijakan moneter dan fiskal

tidak dapat memengaruhi tingkat output dan
kesempatan kerja dalam perekonomian.

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 12 of 31
 THE CLASSICAL VIEW OF THE LABOR
MARKET
CHAPTER 27: The Labor Market, Unemployment,

THE UNEMPLOYMENT RATE AND THE

CLASSICAL VIEW

Ketika kurva AS vertikal, kebijakan moneter dan

fiskal tidak dapat memengaruhi tingkat output
dan kesempatan kerja dalam perekonomian.
and Inflation

Tingkat pengangguran yang diukur kadang-

kadang tampak tinggi meskipun pasar tenaga
kerja bekerja dengan baik.

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 13 of 31
 EXPLAINING THE EXISTENCE OF
UNEMPLOYMENT
CHAPTER 27: The Labor Market, Unemployment,

STICKY WAGES
sticky wages Turunnya kekakuan
upah sebagai penjelasan atas
keberadaan pengangguran.
and Inflation

FIGURE 14.2 Sticky Wages

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 14 of 31
 EXPLAINING THE EXISTENCE OF
UNEMPLOYMENT
CHAPTER 27: The Labor Market, Unemployment,

Social, or Implicit, Contracts

social, or implicit, contracts Perjanjian tak

terucapkan antara pekerja dan perusahaan yang
perusahaan tidak akan memotong upah.
and Inflation

relative-wage explanation of unemployment

Penjelasan untuk upah kaku (dan karena itu
pengangguran): Jika pekerja peduli dengan upah
mereka relatif terhadap pekerja lain di
perusahaan dan industri lain, mereka mungkin
tidak mau menerima pemotongan upah kecuali
mereka tahu bahwa semua pekerja lain
menerima pemotongan serupa.
© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 15 of 31
 EXPLAINING THE EXISTENCE OF
UNEMPLOYMENT
CHAPTER 27: The Labor Market, Unemployment,

Explicit Contracts

explicit contracts Kontrak kerja yang

menetapkan upah pekerja, biasanya
untuk jangka waktu 1 hingga 3 tahun.
and Inflation

cost-of-living adjustments (COLAs)

Ketentuan kontrak yang mengikat upah
dengan perubahan biaya hidup. Semakin
besar tingkat inflasi, semakin banyak upah
dinaikkan.

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 16 of 31
 EXPLAINING THE EXISTENCE OF
UNEMPLOYMENT
CHAPTER 27: The Labor Market, Unemployment,

EFFICIENCY WAGE THEORY

efficiency wage theory Penjelasan untuk

pengangguran yang menyatakan bahwa
produktivitas pekerja meningkat dengan
and Inflation

tingkat upah. Jika demikian, perusahaan

mungkin memberikan insentif untuk
membayar upah di atas tingkat upah pasar.

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 17 of 31
 EXPLAINING THE EXISTENCE OF
UNEMPLOYMENT
CHAPTER 27: The Labor Market, Unemployment,

IMPERFECT INFORMATION

Perusahaan mungkin tidak memiliki informasi yang

cukup untuk mengetahui apa upah di pasar. Dalam hal
ini, perusahaan dikatakan memiliki informasi yang tidak
sempurna.
and Inflation

Jika perusahaan memiliki informasi yang tidak

sempurna atau tidak lengkap, mereka mungkin salah
mengatur upah - upah yang tidak mencapai
keseimbangan di pasar tenaga kerja.

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 18 of 31
 EXPLAINING THE EXISTENCE OF
UNEMPLOYMENT
CHAPTER 27: The Labor Market, Unemployment,

MINIMUM WAGE LAWS

minimum wage laws Undang-undang

yang menetapkan paling rendah untuk
tingkat upah — yaitu, tarif per jam minimum
and Inflation

untuk segala jenis pekerjaan.

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 19 of 31
 EXPLAINING THE EXISTENCE OF
UNEMPLOYMENT
CHAPTER 27: The Labor Market, Unemployment,

AN OPEN QUESTION

The aggregate labor market is very complicated,

and there are no simple answers to why there is
unemployment.
and Inflation

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 20 of 31
 THE SHORT-RUN RELATIONSHIP BETWEEN
THE UNEMPLOYMENT RATE AND INFLATION
CHAPTER 27: The Labor Market, Unemployment,

In the short run, the unemployment rate (U) and

aggregate output (income) (Y) are negatively
related
and Inflation

When Y rises, the unemployment rate falls, and when Y falls, the unemployment rate rises.

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 21 of 31
 THE SHORT-RUN RELATIONSHIP BETWEEN
THE UNEMPLOYMENT RATE AND INFLATION
CHAPTER 27: The Labor Market, Unemployment,

This curve represents the

positive relationship
between Y and the overall
and Inflation

price level (P).

FIGURE 14.3 The Aggregate Supply Curve

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 22 of 31
 THE SHORT-RUN RELATIONSHIP BETWEEN
THE UNEMPLOYMENT RATE AND INFLATION
CHAPTER 27: The Labor Market, Unemployment,

There is a negative relationship between the

unemployment rate and the price level. As
the unemployment rate declines in response
to the economy’s moving closer and closer
to capacity output, the overall price level
rises more and more, as shown in Figure
14.4.
and Inflation

FIGURE 14.4 The Relationship Between the Price Level

and the Unemployment Rate
© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 23 of 31
 THE SHORT-RUN RELATIONSHIP BETWEEN
THE UNEMPLOYMENT RATE AND INFLATION
CHAPTER 27: The Labor Market, Unemployment,
and Inflation

FIGURE 14.5 The Phillips Curve

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 24 of 31
 THE SHORT-RUN RELATIONSHIP BETWEEN
THE UNEMPLOYMENT RATE AND INFLATION
CHAPTER 27: The Labor Market, Unemployment,

inflation rate The percentage change in

the price level.
and Inflation

Phillips Curve A graph showing the

relationship between the inflation rate
and the unemployment rate.

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 25 of 31
 THE SHORT-RUN RELATIONSHIP BETWEEN
THE UNEMPLOYMENT RATE AND INFLATION
CHAPTER 27: The Labor Market, Unemployment,

THE PHILLIPS CURVE: A HISTORICAL

PERSPECTIVE
and Inflation

FIGURE 14.6 Unemployment and Inflation, 1960–1969

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 26 of 31
 THE SHORT-RUN RELATIONSHIP BETWEEN
THE UNEMPLOYMENT RATE AND INFLATION
CHAPTER 27: The Labor Market, Unemployment,
and Inflation

FIGURE 14.7 Unemployment and Inflation, 1970—2004

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 27 of 31
 THE SHORT-RUN RELATIONSHIP BETWEEN
THE UNEMPLOYMENT RATE AND INFLATION
CHAPTER 27: The Labor Market, Unemployment,

AGGREGATE SUPPLY AND AGGREGATE

DEMAND ANALYSIS AND THE PHILLIPS CURVE
and Inflation

FIGURE 14.8 Changes in the Price Level and Aggregate Output Depend on
Shifts in Both Aggregate Demand and Aggregate Supply

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 28 of 31
 THE SHORT-RUN RELATIONSHIP BETWEEN
THE UNEMPLOYMENT RATE AND INFLATION
CHAPTER 27: The Labor Market, Unemployment,

The Role of Import Prices

and Inflation

FIGURE 14.9 The Price of Imports, 1960 I–2005 II

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 29 of 31
 THE SHORT-RUN RELATIONSHIP BETWEEN
THE UNEMPLOYMENT RATE AND INFLATION
CHAPTER 27: The Labor Market, Unemployment,

EXPECTATIONS AND THE PHILLIPS CURVE

Expectations are self-fulfilling. This means that

wage inflation is affected by expectations of
future price inflation.
and Inflation

Price expectations that affect wage contracts

eventually affect prices themselves.

Inflationary expectations shift the Phillips Curve to

the right.

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 30 of 31
 THE SHORT-RUN RELATIONSHIP BETWEEN
THE UNEMPLOYMENT RATE AND INFLATION
CHAPTER 27: The Labor Market, Unemployment,

IS THERE A SHORT-RUN TRADE-OFF BETWEEN

INFLATION AND UNEMPLOYMENT?

There is a short-run trade off between inflation and unemployment, but other factors
and Inflation

besides unemployment affect inflation. Policy involves much more than simply choosing
a point along a nice, smooth curve.

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 31 of 31
 THE LONG-RUN AGGREGATE SUPPLY CURVE, POTENTIAL
GDP, AND THE NATURAL RATE OF UNEMPLOYMENT
CHAPTER 27: The Labor Market, Unemployment,
and Inflation

FIGURE 14.10 The Long-Run Phillips Curve: The Natural Rate of Unemployment

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 32 of 31
 THE LONG-RUN AGGREGATE SUPPLY CURVE, POTENTIAL
GDP, AND THE NATURAL RATE OF UNEMPLOYMENT
CHAPTER 27: The Labor Market, Unemployment,

natural rate of unemployment The

unemployment that occurs as a normal
part of the functioning of the economy.
and Inflation

Sometimes taken as the sum of frictional

unemployment and structural
unemployment.

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 33 of 31
 THE LONG-RUN AGGREGATE SUPPLY CURVE, POTENTIAL
GDP, AND THE NATURAL RATE OF UNEMPLOYMENT
CHAPTER 27: The Labor Market, Unemployment,

THE NONACCELERATING INFLATION RATE OF

UNEMPLOYMENT (NAIRU)
NAIRU
The nonaccelerating
inflation rate of
and Inflation

unemployment.

FIGURE 14.11 The Long-Run Phillips Curve:

The Natural Rate of Unemployment

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 34 of 31
 REVIEW TERMS AND CONCEPTS
CHAPTER 27: The Labor Market, Unemployment,

cost-of-living adjustments NAIRU

(COLAs) natural rate of unemployment
cyclical unemployment Phillips Curve
efficient wage theory relative-wage explanation of
explicit contracts unemployment
and Inflation

frictional unemployment social, or implicit, contracts

inflation rate sticky wages
labor demand curve structural unemployment
labor supply curve unemployment rate
minimum wage laws

© 2007 Prentice Hall Business Publishing Principles of Economics 8e by Case and Fair 35 of 31