Which of the following is equal to 86.2 cm? 8.62 m 8.62"10#4 km 0.862 mm 862 dm
Econ 201: Week 13 Unemployment Labor Force Statistics • Created by the BLS (Bureau of Labor Statistics) in the U.S. Department of Labor • Based on regular survey submitted from 60,000 households • Based on “adult population”-‐ 16 years and older o Disincluding: military, institutionalized, incarcerated, minors Population divided into 3 groups: by BLS 1. Employed-‐ Paid employer, self-‐employed, and unpaid workers in a family business 2. Unemployed-‐ Non-‐working people that have been looking for work the past 4 weeks 3. Not in the Labor Force-‐ Everyone else (stay at home moms, full time students, retires) Labor Force • All people capable of working (whether currently working or not) o Working: Employed o Actively looking for work: Unemployed Civilian Adult Population Labor Force Non-‐Labor Force Employed Unemployed • Unemployment Rate o Percentage of unemployment in the Labor Force o Also called U-‐Rate § = 100 * (# unemployed/ labor force) • Labor Force Participation Rate o Percentage of the Adult Population in the Labor Force § = 100 * (labor force/ adult population Understanding Unemployment • Categorized by its characteristics and duration o Not always the same o Basic truth: there’s always some U • The natural rate of U o The normal rate of unemployment around the actual unemployment rate fluctuates § Made up of frictional and structural unemployment § The long run “average” • Unemployment Insurance: o Government program that provides funding to unemployed workers § Benefits: Reduce income uncertainty; increases search time; increases possibility of job that is a good fit, this increasing productivity § Costs: Increases frictional unemployment Explaining Natural Rates of U • Frictional Unemployment: o When workers are searching for a job that best suits their skills/taste o Short-‐term in most cases • Structural Unemployment: o The skills of the worker aren’t “valued” by the market o Occurs when there aren’t enough jobs in the market § Can be long-‐term § Can result from “sticky wages” W 1: actual wage Explaining Structural U: Policy Occurs when wages are above equilibrium W eqm 1. Min Wage Laws: Price floor (mostly effects teen employment) 2. Unions: Worker association; collective bargaining w/ employers over wages, benefits, and working conditions 3. Efficiency Wages: Firms voluntarily pay higher than equilibrium wages to boost worker productivity Cyclical Unemployment • The deviation of unemployment from its natural rate • Associated with the business cycles: short-‐run • Result of deficient demand Labor Market Statistics: Policy • The Official U Rate (U-‐3) and others: published by BLS o Statistics based on demographic information o Measured the length of U • Data shows drastically different labor market experiences for different groups (age, race, etc.) • Trends help policy makers make better polices o Caveat: Trends can inform, even if data flawed Types of Unemployed People • Marginally Attached: person is neither working nor looking for work; person wants to work, is available, and has looked in the past 2 months. Is not included in U. • Discouraged Workers: person would like to work, but has stopped looking because of a, “given up on the job market” related reason. Identified as “Not in the Labor Force.” • Underemployment: person is working below their skill level. U-‐rate fails to show economy failure.