Question

Here are some of the demographics. Answer the questions below.

Total population	325.0 million
Total population employed	165.2
Total population seeking jobs	7.7
Total student population (not working)	5.1
Total retired persons	30.4
Total household workers	56.4
Total discouraged workers	2.5
Population age of 15 or older	267.3

a.    Calculate labor force percentages and the unemployment rate.

b.    Calculate the employment rate.

c.     Use this data to explain what the problem is with the unemployment rate statistics.

d.    Explain why the employment rate is so important in labor economics.

Answer 1

A. In labor force percentage = 165.2÷267.3= 61.80%

Out labor force percentage = 102.1÷ 267.3= 38.19%

B. Labor force= 172.9 million

Unemployment rate= 7.7÷172.9= 4.45%

C. The point is that the adult population is not just divided into employed and unemployed. A third group exists: people who do not have a job, and for some reason—retirement, looking after children, taking a voluntary break before a new job—are not interested in having a job, either. It also includes those who do want a job but have quit looking, often due to being discouraged by their inability to find suitable employment. Economists refer to this third group of those who are not working and not looking for work as out of the labor force or not in the labor force. The discouraged employee count is not counted in this 4.45%. And they are still unemployed. And also part time workers are also not included in this statistics, which can leads to a misleading conclusion.

D. The national unemployment rate is defined as the percentage of unemployed workers in the total labor force. It is widely recognized as a key indicator of the performance of a country's labor market. As a closely watched economic indicator, the unemployment rate attracts a lot of media attention, especially during recessions and challenging economic times. This is because the unemployment rate doesn't just impact those individuals who are jobless–the level and persistence of the factors of unemployment have wide-ranging impacts across the broader economy.