Chapter 15 of the macroeconomics text focuses on unemployment, its measurement, causes, and effects. The Bureau of Labor Statistics (BLS) categorizes the adult population (16+) into the employed, unemployed, and those not in the labor force. The labor force includes people working or actively seeki...
● In the USA, the Bureau of Labor Statistics (BLS) measures unemployment via a
monthly survey.
● Adult Population
○ all adults age 16+
● Labor Force
○ Labor Force = Employed Population + Unemployed Population
○ Portion of the adult population that is working/capable of working
○ Labor Force Ptcpn. Rate = Labor Force/Adult Pop. x 100
● Employed Population
○ Work as paid employees
○ Work with or without pay in self-owned or family businesses
○ Work full-time or part-time
○ Are employed despite vacation, illness, bad weather or any other reason
● Unemployed Population
○ Are not at all employed
○ Are not available for work
○ Tried & failed to find employment (previous 4 weeks)
○ Waiting to be recalled to job after temporary layoff
○ Unemployment Rate = Unemployed Pop./Labor Force X 100
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, ● The Four Types of Unemployment
○ Frictional Unemployment:
■ Occurs when a worker moves to a new city or job. This type of
unemployment is considered unavoidable and not a serious
problem
■ Result of workers stuck in job search
■ e.g. a recent graduate looking for work.
○ Seasonal Unemployment
■ Occurs when business operations are only available during certain
seasons
■ E.g. agriculture, holiday destinations, ice manufacturing
○ Cyclical Unemployment
■ Occurs when the economy fluctuates and production levels are
below what is needed for a strong economy
■ E.g. firms hire less employees due to decrease in demand for their
good or service
○ Structural Unemployment
■ Occurs when the economy’s structure changes causing somme
industries to shrink and occupations to decline
■ Can result from high minimum wage laws which cause labor supply
to exceed labor demand
■ E.g. Factory jobs are eliminated due to automation
● Not in The Labor Force
○ Neither of the previous two categories
○ Includes full-time students, homemakers & retirees
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