Sunday, January 20, 2008

How to explain recession to children

january 20 2008

The children have heard so much on TV about recession that they started asking questions.

I'm old enough to understand the whole process, so I can explain that.
But I made one huge mistake.

I took Michigan as an example.

Hundreds of thousands of people have lost their jobs in the car industry.
With less expensive cars from for instance japan, the american industry suffers. Suffers hard.
People almost always go for cheaper.
And when you ship the money out, and a product that can be thrown away in the end in...

But while I was explaining that in many businesses there isn't enough money available to pay the workers, so they they have to leave and try to find a job elsewhere (which is a real problem), I realised I was working myself into a corner.

"Because there aren't enough workers and because there's less production all sorts of other businesses suffer.
There are less waitresses necessary in the restaurants, less drivers to transport the products to the shops.
And because the shops have less to sell there are less people necessary there..

Even the bosses get less money, because they have to do the normal job, because the workers have gone."

I had cornered myself completely when I asked myself what the difference is between nearly a recession and a recession.

Michigan has the highest unemployment rate of the USA.
And it's easy to understand it won't change in the near future.

I should have choosen an argicultural illustration, because I could have talked myself out of the seasonal/winter unemployment rates.

So the kids and I had a long talk, and we wrote down some interesting questions for their teacher of economics.

He won't like me anymore the day after tomorrow.

The children won't ask the questions because they don't know the answers, but because we think it's important that the teacher teaches about the subject.
Moneyproblems are part of everyday life, and children need to understand why.
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