Chapter 6 homework
• Don’t forget homework due Friday…
• Questions 6, 10, 14, and 16
Chapter 7
Unemployment
and Employment
What are the numbers??
**Find the most current you can**
• Federal Unemployment Rate
• Pennsylvania Unemployment Rate
• Montgomery County Unemployment
Rate

4.6% January 2007

4.6% December 2006

3.7% September 2006
Defining the Labor Force
• The civilian labor force is comprised
of individuals who meet all of the
following criteria:

Are at least 16 years old

Are not in the armed services

Are not incarcerated or otherwise
institutionalized

Have a job or have looked for work in the
last four weeks
Characterizing Employment Status
• Anyone who is in the labor force and
working is employed.
• Anyone who is in the labor force and
not working is unemployed.
Figure 7.1
The U.S. Labor Force in 2004
The Labor Force Participation Rate
• Percentage of the population that is
working or actively seeking work.
• Are you part of the labor force?

NO!!
Changing Face of the U.S. Labor Force
• Since 1970, the labor force participation rate
of women has grown steadily.

Between 1970 and 2004, the labor force
participation rate of women increased from about
43% to about 60%.
• Better education for women
• More divorces
• Less discrimination

The labor force participation rate for men fell over
this period.
• Are men getting lazy?
Changing Face
of the U.S. Labor Force (cont’d)
• Between 1970 and 2004, the number of
African Americans in the labor force
increased by 78%.
• The number of Hispanics in the labor force
increased from about 6 million in 1980 to
more than 19 million by 2004.


Before 1970 the BLS didn’t even separate out
Hispanics in the data collection  too few
Increase mostly due to increases in immigration
• Estimated that 1/6 of Hispanic residents entered the U.S.
since 1990
Figure 7.2
The Changing Pattern of Employment
Counting the Unemployed
• The Bureau of Labor Statistics (BLS) is
the government agency that collects
data on prices, workers compensation
and employment.

Data on employment and unemployment
are collected monthly through the Current
Population Survey.
• A survey of a random sample of about
60,000 households
Counting the Unemployed (cont’d)
• People are considered employed if:

They have a job.

They worked at least 15 hours per week
without pay in a family business.

They are temporarily away from work due
to illness, accident, or strike.
Counting the Unemployed (cont’d)
• People are considered unemployed if:

They are in the labor force but don’t
have a job.

They are waiting to start a new job.

They are waiting to be recalled from a
temporary layoff.
The Civilian Unemployment Rate
• The civilian unemployment rate (u) is
the percentage of the civilian labor force
that is unemployed:
u
Number of Unemployed
100
Civilian Labor Force
Number of Unemployed

100
Number of Unemployed  Number of Employed
The Civilian Unemployment Rate (cont’d)
• The unemployment rate gives economists
a good overall picture of the status of the labor
market.
• Which has a higher unemployment rate?

1989 where 8.5 million people were unemployed and
115 million were employed

1935 where 7.8 million people were unemployed and
44 million were employed
• 1935!!!

1989 = (8.5)/(8.5+115) = 0.0688 = 7%

1935 = (7.8)/(7.8+44) = 0.1506 = 15%
The Civilian Unemployment Rate (cont’d)
• Individual unemployment rates are also
calculated

Different characteristics of the population such as
age, race, educational attainment, ethnicity, and
gender.

Teenagers, minorities, and high school dropouts
have higher unemployment rates than others do.
• Why would this be important?