Question

  1. Why do Black and Latino employees have a greater propensity to part-time work as opposed to full-time work.  What do you suspect would be the reason and why?

2. The most recent unemployment rate as reported by the Bureau of Labor Statistics for May 2020 was estimated at 13.3%.  The statistics below (in 1,000s) are derived from that report:

• Employed: 137,242
• Unemployed: 20,985
• Discouraged Workers: 662

If discouraged workers were counted as part of the unemployed, the unemployment rate would change from 13.3 percent to what percent?  Please show your work.

3. Explain why COVID-19 would be contributing to the number of underemployed workers.

Answer 1

1. Black and Latino employees are often discriminated against in the workplace, and are offered low level or part time or contractual jobs, as opposed to white workers having the same skillset.

Thus, discriminating against the blacks leads them to have higher propensity to part time work instead of full time work.

2. New unemployed workers = 20,985+662 = 21,647

New labor force = 21,647+137,242 = 158,889

Unemployment rate = unemployed/labor force

Unemployment rate = 21647/158,889

Unemployment rate = 0.1362 or 13.62%

Thus, unemployment rate rises to 13.62%

3. COVID-19 led to poor business performance and growth along with poor demand for goods and services, leading to lot of layoffs in the labor market.

Also, demand for workers to perform meagre tasks like working for government to distribute pamphlets, pick up patients, dispose off bodies, engage in reporting numbers in hospitals, cleaning staff etc.

A lot of over qualified workers found themselves working such work in order to make some money during times of layoffs.

This led to an increase in the number of underemployed workers.