Question

We have to assume that once a person got a job they would receive that wage forever. Of course that is not the case. People typically retire around age 65. For this question compare unemployed workers that are 20 - 30 years old to unemployed workers that are 55 - 65. How would these workers asking wage, unemployment rates and expected duration of unemployment compare?

1. 55 - 65 age group have an asking wage that is:

A. Higher than the 20-30 age group

B. Lower than the 20-30 age group

C. Not enough information

2. 55 - 65 age group have an unemployment rate that is:

A. Higher than the 20-30 age group

B. Lower than the 20-30 age group

C. Not enough information

3. Suppose that unemployment insurance benefits are currently not taxed by the federal government. Would you expect a new tax on unemployment insurance benefits to increase or decrease the unemployed's asking wage, the unemployment rate and the expected duration of unemployment:

Asking wage:

A. Increase

B. Not enough information

C. Decrease

Unemployment rate:

A. Increase

B. Not enough information

C. Decrease

4. Suppose that Baltimore implements a program to allow job seekers to take public transportation for free while they are search for work.   Would you expect this to increase or decrease Baltimore job seeker's asking wage and the expected duration of his unemployment spell?

Asking wage:

A. Increase

B. Not enough information

C. Decrease

Answer 1

Unemployment rate

Looking forward, we estimate Unemployment Rate in the United States to stand at 3.90 in 12 months time. In the long-term, the United States Unemployment Rate is projected to trend around 4.10 percent in 2021 and 4.40 percent in 2022, according to our econometric models.The United States economy continued to thrive in April, with the unemployment rate dropping to 3.6 percent—the lowest unemployment rate since December 1969, according to the Bureau of Labor Statistics' (BLS) household survey.

The household survey finds that the unemployment rate fell to 3.5 percent in September, marking the 19th consecutive month at or below 4 percent unemployment. The unemployment rate is the lowest it has been since May 1969—over 50 years ago. All Americans are benefiting from the labor market's continued improvement.

The U.S. has added millions of jobs since the Great Recession, when unemployment touched 10% at its height. Low unemployment is often regarded as a positive sign for the economy. Too low a rate of unemployment, however, can actually have negative consequences such as inflation and reduced productivity.

The unemployment rate is the share of the labor force that is jobless, expressed as a percentage. It is a lagging indicator, meaning that it generally rises or falls in the wake of changing economic conditions, rather than anticipating them. When the economy is in poor shape and jobs are scarce, the unemployment rate can be expected to rise. When the economy is growing at a healthy rate and jobs are relatively plentiful, it can be expected to fall

In the U.S., the U-3 rate, which the Bureau of Labor Statistics (BLS) releases as part of its monthly employment situation report, is the most commonly cited national rate. It is not the only metric available, however, and it receives criticism for giving the impression that the labor market is healthier than alternative measures would indicate. For this reason, some observers prefer to track the more comprehensive U-6 rate (see below).

KEY TAKEAWAYS

A)The unemployment rate is the proportion of the labor force that is not currently employed but could be.

B)There are six different ways the unemployment rate is calculated by the Bureau of Labor Statistics using different criteria.

C)The most comprehensive statistic reported is called the U-6 rate, but the most widely used and cited is the U-3 rate.