Question

In an essay of at least two well-developed paragraphs, explain how the government calculates the unemployment rate. Give an original example to aid your explanation. Please dont copy and paste from anywhere!!

Answer 1

How the Government calculates the rate of unemployment

• The rate of unemployment is derived by applying the formula of number of unemployed people divided by the total number of people in the labor force.
• The whole task is performed and the rate of unemployment is derived by the Bureau of Labor Statistics (BLS).
• The basic standard is the person must be over the age of 16 and should be available to work full time during the past 4 weeks.
• The person should be actively looking for job in the said time.
• Many sub groups are formed by the BLS for calculating the rate of unemployment, therefore, it should be carefully taken into consideration that the concerned people fall into which category.
• Certain important categories are long term unemploed, marginally attached to labor force, discouraged workers etc.
• One of the unemployment rates that the BLS calcuates is the "Real unemployment rate", this also includes the marginally attached and the discouraged workers, and also the part timers and the full timers.
• As it takes into consideration almost all the areas, many believe that this is the effective rate.
• Frictional unemployment is calculated when people quit job they dont like to get a better one.
• Structural unemployment which is also called as the long term unemployment is when the skills no longer matters in the job.
• Classical unemployment is when the whole calculation depends on tbewages, labor unions, price controls etc.
• The unemployment that rises as a result of the business cycles is the cyclical unemployment.

Eg :-

U.S unemployment rate is shown in December each year. It has exceeded 10 percent two times. At the time of Great Depression it was between 14% and 24.8% and later it increased from 1931 to 1940. and it ended above 10% in 1982, @ 10.8%. In December 2017 it is below 5%.