foreign hello this is Professor Tyler Watts from Ferris State University in this video I'm going to show you how to use the jobs trained classroom activity to teach some basic principles of unemployment so starting off we're going to learn about unemployment right and I want to start off by thinking about unemployment by doing a little exercise we call the jobs training we're going to take a ride on the job stream all right so without any detailed definition or formal definition I just want your gut reaction on this question what is the optimal rate of unemployment four percent four six eight eight two two if you thought that unemployment is bad and we ought to get rid of all unemployment then the optimal unemployment rate is zero and we want to get off get rid of all the unemployment in our economy okay so let's start off by saying we're going to get rid of all the unemployment in our economy and the economy is the classroom and you all are the workers people in the labor force looking for jobs wanting to have jobs okay and the only way we can get rid of unemployment is this and this is kind of a metaphor the jobs train you see here okay and each uh car and the job stream represents a job opening in the economy and what I want you to imagine is this as soon as you either enter the labor market and watching a job or if you've lost the job you already had what happens is you just teleport to the job station and the jobs train is rolling by very slowly and what's going to happen is the next available job open in the economy you just jump on there okay so you're really unemployed for a negligible period of time so we've conquered unemployment and unemployment this year everybody understand how this works okay so I'm just going to go around one person at a time we'll just one car for everybody and when you're either entering the labor market you know you graduate from college look for your first job but yeah you're gonna have one right now as soon as you say I want a job you're gonna have one or we could maybe can say that you're uh you've already had a job you lost it for whatever reason you're gonna teleport right to the job station we're going to put you into the next available car you won't be unemployed for any length of time okay so we conquer unemployment in the jobs train economy zero percent on a plane okay so let's start here awesome what is now I want you to tell me what is the job you want or aspire to don't think too hard about it just you could tell me a job you're interested in you could tell me what your actual job aspiration is just put out a job that you you would want or be interested okay CPA certified public accountant I'll just say accountant okay well let's see what you get because you know you get to the job station and the next available job is is what it is so you've got a job as a butcher okay it's not quite accounting but uh Hey you're not going to be unemployed and that's a good thing right yeah okay so mine style station uh oh you got the account job only we have flipped you guys around but hey no no can do because nobody's gonna be allowed to be unemployed for any length of time in this economy okay and you know you're still working with numbers so you'll probably still be pretty good at it even right okay Connor accounting okay I want everybody to say accounting but uh we probably won't but we've got naturally a lot of accountants here in the business school you're a cab driver you're a taxi driver uh you know maybe not as glamorous as accounting but at least you're not unemployed right um Taylor what uh what industry okay a hog farmer okay financial advisor Financial yeah there we go that's a good business school oh ding ding ding hey we got a match all right so that's good and you're not on the play okay Cheyenne well that was one of these financial advisors that's a good job you're a police officer but you're not unemployed like um CEO of Southwest Airlines yeah would you accept a different Airline yes I'll just say Airlines oh yeah I'm sorry McDonald's fast food it's another fast food okay you're in actuary what is that those are people who know a lot of statistics and work for insurance companies to calculate risks and figure out what premiums they need to charge to cover their risks sure you are Undertaker at least they're not unemployed Justin football coach football football coach you're an economics professor it's a similar skill set actually yeah police officer sewer worker okay a train engineer a waiter okay Carlos uh lawyer airline pilot oh that would have been better for you construction manager construction manager foreign youth pastor oh good enough rottenham your computer programmer um and last but not least another accountant you're an exotic dancer Okay so what's going on here uh there's two things I want to think about uh first off I want to ask how many of you if you if this was the actually the way the economy worked miserable how yeah how many of you first off are happy in the job you got assigned to how many pan over there to show Rod the show of hands one and uh Lindsay she became an actuary too okay so two out of 16 of us were happy with the job you're assigned okay there's so there's one big problem with this scenario uh second point is how many think you're qualified for the job you got assigned and could actually do it competently I don't know I don't know you know it comes against our etvu value so you're not allowed to raise your hand Okay so we've got a keep your hands up and one two three four five six seven eight nine ten ten I don't know if you guys might be able yeah you guys score high on confidence I'll give you that but uh okay so in terms of Happiness let me just kind of chart these things down in terms of happy with the job better one out of 16. and in terms of things has to be there I think you are qualified you've got 10 out of 16. a big problem with happiness virtually nobody's happy and in fact you might not be not just not happy but you might be very miserable doing something that you don't want to do you're not interested in like who's the Undertaker Not only would you say that you would be unpleasant that'd be unpleasant work for you you don't want to do that what's like yeah think about just watching jobs so you know this these these two problems stand out the fact that there's there's not a lot of happiness with the assigned jobs and then um probably not a very good matching of what your actual skills and qualifications are with the assigned jobs so I've taken us to zero percent unemployment but if we had the choice and if you could pass up the next available job in the economy how many would okay so most of the hands are up now so most of us are saying we would pass up the next available job well guess what and this is really the whole point of the exercise if you pass up an available job because you think it's not the right job for you whether because you don't you don't think you'd like that job and or you're not skilled for it and then you spend time searching for a job that you are going to be happy with and are qualified for guess what you are unemployed right so I want us to start thinking about the concept of unemployment in terms of it's not something that's bad okay it's not inherently bad it's just a natural part of a process where we need to match people to jobs on these two grounds jobs that people want one and would be happy with and two jobs that people are qualified for and would be good at and so those two dimensions of matching people to jobs means that sometimes people are going to pass up jobs even though that they might be qualified for because they might be in a different part of the country or they might be with their company and if they're not happy with right and then there's going to be episodes where we have even a free labor market where we've got episodes of people losing jobs because of technological change because of geopolitical changes so we'll have episodes where people us people don't have the right skills to get the open jobs okay so there's going to be at least two reasons why we expect to always have some unemployment in the economy and therefore unemployment is not bad it's not necessarily good we can maybe say that some level of it is excessive but we know that there is always going to be some unemployment right so actually and those of you who are saying four six percent you're actually pretty close to what most economists would estimate as being kind of the optimal rate for the U.S economy