Chapter
Eight:
Employment and
Unemployment
Paid Work and Unemployment in the
United States
Figure 8.1: Who is in the Labor Force?
Are you:
A
•Under age 16?
•In an institution?
•On active duty in the
military?
“Yes” to any
question
NOT SURVEYED BY
THE BUREAU OF
LABOR STATISTICS
70.7 million
“No” to all questions in Box A
Did you:
B “Yes”to either
•Work at all last week
question
for pay or profit?
•Work 15 hours or
more in a family
business?
“No” to both questions in Box B
EMPLOYED
•Have you been
C
actively searching for
work?
•Are you available to
start a job?
UNEMPLOYED
143.5 million
LABOR
FORCE
155.5 million
“Yes”to both
questions
“No” to either question in Box C
12.0 million
NOT IN THE LABOR FORCE
89.3 million
Source: BLS News Release, “The Employment Situation—February 2013,” March 8, 2013; U.S. Census Bureau Current Population Clock.
Table 8.1: Unemployment Rates for Different
Groups
Source: BLS News Release, “The Employment Situation—February 2013,” March 8, 2013. a People are allowed to indicate more than one racial group.
However, data from people who indicated more than one race are not included in these statistics.
Figure 8.2: Male and Female Labor Force
Participation Rates, Aged 24 to 54, 1948-2012
100
Men
90
80
Percent
Women
70
60
50
40
30
1948
1956
1964
1972
1980
1988
1996
2004
2012
Sources: Mosisa, Abraham, and Steven Hipple, “Trends in Labor Force Participation in the United States,” BLS Monthly Labor Review, p. 35–57, October 2006;
BLS 2013 Employment and Earnings Online, Household Survey Data, Table 3; various editions of the Statistical Abstract of the United States
Unemployment
Unemployment Rate
Figure 8.3: The Monthly Unemployment Rate in the
United States, 1969-2013
1969- 19731970 1975
1980 19811982
Source: U.S. Bureau of Labor Statistics online database
19901991
2001
20072009
Figure 8.4: Average Duration of Unemployment
and Unemployment Rate, 1970-2012
12
40
Unemployment Rate
10
35
8
30
25
6
20
4
15
10
5
0
1969
Average Duration of
Unemployment
1976
Source: U.S. Bureau of Labor Statistics online database
1983
1991
2
1998
2005
0
2013
Unemployment Rate (Percent)
Average Duration of Unemployment
(Weeks)
45
Theories of Employment,
Unemployment, and Wages
Figure 8.5a: The Classical Labor Market Model
Wage
Supply
WE
Demand
LE
Quantity
of Labor
Figure 8.5b: Unemployment in the Classical Labor
Market Model
Wage
Labor Surplus
(Unemployment)
Supply
W*
Demand
LD
LS
Quantity
of Labor
Figure 8.6: Real Nonfarm Median Wages and
Labor Productivity, 1947-2012
Real Nonfarm Labor
Productivity (1947=1)
Real Nonfarm Hourly
Wages (1947=1)
Source: U.S. Bureau of Labor Statistics, Labor Productivity and Costs online database