how do we calculate unemployment rates and what does it tell us?
TRANSCRIPT
Employment and unemployment
How do we calculate unemployment rates and what does it tell us?
What is the labor force?Each month the Bureau of Labor Statistics
(BLS) assembles information on the labor force
What is the labor force?Let’s start by figuring who it’s not
Military personnelInstitutionalized populationUnder 16 years oldPeople who don’t want a job
Stay-at-home parents Retired people Students Discouraged workers
What is the labor force?Let’s start by figuring who it’s not
Military personnelInstitutionalized populationUnder 16 years oldPeople who don’t want a job
Stay-at-home parents Retired people Students Discouraged workers whohave given up looking for ajob
What is the labor force?Let’s start by figuring who it’s not
Military personnelInstitutionalized populationUnder 16 years oldPeople who don’t want a job
Stay-at-home parents Retired people Students Discouraged workers whohave given up looking for ajob
What is the labor force?Let’s start by figuring who it’s not
Military personnelInstitutionalized populationUnder 16 years oldPeople who don’t want a job
Stay-at-home parents Retired people Students Discouraged workers whohave given up looking for ajob
What is the labor force?Let’s start by figuring who it’s not
Military personnelInstitutionalized populationUnder 16 years oldPeople who don’t want a job
Stay-at-home parents Retired people Students Discouraged workers
What is the labor force?Let’s start by figuring who it’s not
Military personnelInstitutionalized populationUnder 16 years oldPeople who don’t want a job
Stay-at-home parents Retired people Students Discouraged workers whohave given up looking for ajob
What is the labor force?Let’s start by figuring who it’s not
Military personnelInstitutionalized populationUnder 16 years oldPeople who don’t want a job
Stay-at-home parents Retired people Students Discouraged workers whohave given up looking for ajob
Another way of looking at it
Unemployment requirementsTo be considered unemployed, you have to
answer yes to all of these questions1. Over the age of 16.2. Actively looking for work.3. Unable to find any work, even part-time
What are ways the number of people classified as “unemployed” can get smaller, without actually meaning the economy is getting stronger?
Is this person unemployed?
Is this person unemployed?
Is this person unemployed?
Is this person unemployed?
Is this person unemployed?
How to calculate unemployment
The number of unemployed people
The labor force
(divided by)
Unemployment Rate PracticeAssume a nation has 100 people total. Forty-
five of them have jobs, and five of them are looking for jobs but cannot find them. The rest don’t have jobs and don’t want them.
Unemployment Rate PracticeAssume a nation has 100 people total. Eighty
of them have jobs, and twenty of them are looking for jobs but cannot find them. The rest don’t have jobs and don’t want them.
Unemployment Rate PracticeAssume a nation has 100 people total. Ten of
them have jobs. The rest don’t have jobs and don’t want them.
QuestionCould we ever have an unemployment rate of
0%?Why or why not?Is that automatically a bad thing?
What is an acceptable unemployment rate?
Types of unemploymentFrictional—people entering the workforce
for first time or re-entering after taking time off, people who move or quit their current job because they’d like to try something new
Examples:
Types of unemploymentSeasonal—people who temporarily lose their
job every year around the same time because the job itself depends upon the season
Examples:
Types of unemploymentCyclical—people who lose their jobs because
of recessionsExamples:
Types of unemploymentStructural/Technological—people who lose
their jobs because the economy itself is changing, particularly with the adoption of technology
Examples:
Education and employment
Oil boom town?What is the impact of new jobs in the oil
boom towns of North Dakota?
Top 10 then and nowWhat are the differences in the top 10
employers in the 1950s and now?