Jobs and Unemployment

Outline1. The labor force2. The labor force participation rate3. The unemployment rate4. Sources of unemployment

The Current Population Survey counts all persons as unemployed who, during the week before the monthly survey

1. Had no employment,

2. Were available for work,

and either

1. Had made specific efforts to find employment some time during the previous 4 weeks or

2. Were waiting to be recalled to a job from which they had been laid off.

Labor force does not include

Discouraged WorkersPeople who are available and willing to work but have not made specific efforts to find a job within the previous four weeks.

23.5 million new jobshave were added in the

U.S. 1991 and 2000. However, the U.S. lost

2.8 million jobs between March 2001 and August

2003.

Nonfarm payrolls fell by 764,000 between January and September, 2008

Labor force participation rate

The labor force as a percent of the adult population.

30

40

50

60

70

80

90

50 55 60 65 70 75 80 85 90 95 00 05

16-19 y ears Men, 20 y ears and older W omen, 20 y ears and o lder

Labor Force Participation Rates in the USA (percent)

Year

Source: www.bls.gov

9

The adult population sums: employed, unemployed, and those not in labor force, June 2007 (in millions)

LABOR FORCE(153.1)

Employed(146.2)

NOT WORKING(85.5)

Not in labor force(78.6)

Unemployed (6.9)

Labor force= employed + unemployedNot working = not in the labor force + unemployedAdult population = employed + unemployed + not in the labor force

Civilian Non-institutionalized population (16 and older)

232,616

Civilian Labor Force 153,824 Employed 146,248 Unemployed 7,576 Not in the Labor Force 78,792

%9.4100824,153

576,7100forcelabor in #

unemployed of #UR

Employment statistics for the U.S., January 2008 (in thousands)

Thus, the unemployment rate (UR) is given by:

Source: www.stats.bls.gov

Unemployment was 6.1 percent in September 2008

13

Unemployment rates for 20 years of age and older

14

Unemployment rates for 16 to 19 years of age

15

Unemployment rates differ: US metropolitan areas

16

Since 1980, the US unemployment rate fell, Europe’s remained high, and Japan’s rose

Europe

U.S.

Japan

Economists distinguish between four types of unemployment:FrictionalSeasonalStructuralCyclical

Frictional Unemployment Joblessness experienced by people who are between jobs or are just entering (or re-entering) the labor market.

I am looking for a job in my field—speech pathology

Seasonal Unemployment Joblessness related to changes in the weather, tourist patterns, or other seasonal factors.

It’s hard to find work as a ski instructor during the summer

months

Structural Unemployment Joblessness arising from mismatches between workers’ skills and employers requirements or between workers’ locations and employers’ locations.

An industrial robot took my job.

Cyclical UnemploymentJoblessness arising from changes in production over the business cycle

I couldn’t find workin 1991 due to slump

in home building

UNEMPLOYMENT COMPENSATIONJob losers may be eligible to collect unemployment benefits for up to

26 weeks. Maximum weekly benefits vary by state. Maximum weekly benefits in Arkansas are currently $345. In Washington

state they are $496.

The basic requirements for collecting unemployment are: •You must have been employed. •You must be determined to be unemployed through no fault of your own as defined under state law.•You must file ongoing claims and respond to questions concerning your continued eligibility. You must report any earnings from work and any job offers or refusal of work during any claim period. •Benefits are determined based on the individual’s earning during a “base period.”