15.1: Identifying Unemployment
How is Unemployment Measured?
It is monitored by the Bureau of Labor Statistics (BLS), apart of the Department of Labor
Survey responses of each adult (age 16+)
Employed- s those who worked as paid employees, worked in their own business, or worked as unpaid workers in a family member’s business. Both full-time and part-time workers are counted. This category also includes those who were not working but who had jobs from which they were temporarily absent because of, for example, vacation, illness, or bad weather.
Unemployed- those who were not employed, were available for work, and had tried to find employment during the previous four weeks. It also includes those waiting to be recalled to a job from which they had been laid off.
Not in the labor force- those who fit neither of the first two categories, such as a full-time student, homemaker, or retiree.
Labor force- the total number of workers, including both the employed and the unemployed
Unemployment rate- the percentage of the labor force that is unemployed
Labor-force participation rate- the percentage of the adult population that is in the labor force
The natural rate of unemployment- the normal rate of unemployment around which the unemployment rate fluctuates
Does the Unemployment Rate Measure What We Want It To?:
How Long Are the Unemployed without Work?
Most spells of unemployment are short, and most unemployment observed at any given time is long-termOne problem is that a few workers who’ve been jobless for a long period of time still aren’t assisted
Economists and policymakers must be careful when interpreting data on unemployment and when designing policies to help the unemployed
Why Are There Always Some People Unemployed?
In an ideal labor market, wages would adjust to balance the quantity of labor supplied and the quantity of labor demanded
Frictional unemployment- unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills
15.2: Job Search
Why Some Frictional Unemployment Is Inevitable:
It is often the result of changes in the demand for labor among a different firm
Sectoral shifts- Changes in the composition of demand among industries or regions
It is inevitable because the economy is always changing
Public Policy and Job Search:
15.3: Minimum Wage Laws:
Minimum wage matters for the least skilled and experienced member of the labor force
If the wage is kept above the equilibrium level for any reason, the result is unemployment
15.4: Unions and Collective Bargaining:
The Economics of Unions:
Are Unions Good or Bad for the Economy?
15.5: The Theory of Efficiency Wages