Question

George, Kim and Cindy all lost their jobs when the technology start-up they worked for was acquired by another company. After a few weeks of searching for another full-time job, George decided to get back to school to get an LPN certification. In order to finish as soon as possible, George chose not to work while finishing the certification. Kim took a part-time job in retail shortly after losing her job, but she continues to search diligently for full-time work. Cindy searched for a job for the first five weeks after being laid off, but as bills began piling up, she found herself moving into her parents’ basement. She recently gave up looking for work, because she figures that there just aren’t jobs available right now so there is no point looking.

a) Are George, Kim and Cindy unemployed, employed or not in the labor force?

b) Would any of the three be considered a discouraged worker? Which one?

c) How would each contribute to the unemployment rate? State whether u-rate increases, decreases or remains the same.

Answer 1

a. Since George is currently not looking for jobs and is nether employed but is doing a certification work. In this case, he is considered not in the labor force of the economy.

Kim is considered as employed because all those who are working part time are considered as employed by the Labor Bureau.

Cindy is currently not looking for job and thus he is considered outside the labor force of the economy.

b. Cindy is considered to be a discouraged worker because Cindy he has been looking for jobs for the first five weeks however, after notgetting any job, he stopped looking for work. Thus, Cindy is considered to be a discouraged worker.

c. In the case of George, unemployment rate will remain constant because he is outside the labor force because he is currently doing a certificate course.

Since Kim is employed part time, he is considered as employed by the Labor Bureau and thus he will decrease unemployment rate.

Cindy is a discouraged worker and will not be counted in the labor force and thus this will keep the unemployment rate constant.