Virtual Econ Video:
Unemployment
1.
How is unemployment measured?
2.
How is the unemployment rate calculated?
3.
What is the significance of the unemployment rate
on the economy?
4.
What is the relationship between the unemployment
rate and economic growth?
Employed =
2. Unemployed =
1.
Is a person retired receiving Social Security
unemployed?
4. Is a disabled veteran unemployed?
5. Labor force participation rate:
3.
LF Formula:
7. Unemployment rate:
6.
8.
Unemp. Formula:
1.
2.
3.
4.
5.
6.
7.
8.
Employed = person has a job
Unemployed = actively looking for work who do not
currently have a job
Is a person retired receiving Social Security
unemployed?
Is a disabled veteran unemployed?
Labor force participation rate: % of population aged 16
or older that is in the labor force
LF Formula: 100 x (LF)/civilian population 16 and older
Unemployment rate: % of the total number of people in
the labor force who are unemployed
Unemp. Formula: 100x (# unemployed/# Labor Force)
http://www.youtube.com/watch?v=hwWGzQ_FUtQ&feature=related
http://www.tradingeconomics.com/united-states/unemployment-rate
http://www.cbsnews.com/video/watch/?id=6987699n&tag=contentMain;content
Aux
http://www.bls.gov/bls/unemployment.htm
1.
What is happening in the economy when the
unemployment rate is low?
2.
What is happening in the economy when the
unemployment rate is rising?
3.
What is happening in the economy when the
unemployment rate is consistently high?
What is happening in the economy when the unemployment
rate is low?
1.
›
›
›
Sustainable economic growth
(GDP is positive & steady),
jobs are plentiful,
What is happening in the economy when the unemployment
rate is rising?
2.
›
›
›
›
Consumers are buying less products,
businesses produce less,
workers begin to be laid off
GDP begins to decline
What is happening in the economy when the unemployment
rate is consistently high?
3.
›
›
›
Businesses have slowed production & fired many workers
Jobs cannot be found
People without jobs do not spend or invest
1.
Ex: The economy is weak & John has seen his hours
cut from 40 to 10. He is still employed but what is the
problem with his employment scenario?
2.
Ex: Lauren has her Master’s degree, but can only find
work as a bartender in a coffee shop. She still has a
job, but do her skills match her work?
3.
John and Lauren are ________________ & are not
counted in the __________________.
1.
Ex: The economy is weak & John has seen his hours
cut from 40 to 10. He is still employed but what is the
problem with his employment scenario?
2.
Ex: Lauren has her Master’s degree, but can only find
work as a bartender in a coffee shop. She still has a
job, but do her skills match her work?
3.
John and Lauren are underemployed & are not
counted in the unemployment rate.
1.
Anna has been unsuccessfully seeking
work for over a year, and she finally
decided to give up. But, would she take a
job if there was one to take?
2.
Anna is d________________and not
counted in the u_______________rate.
Not counting underemployed workers
and discouraged workers causes the
official unemployment scenario to
appear l_______or ________ than the
actual labor market conditions.
Why would the government not count
these people in the UR?
3.
4.
Explain the above cartoon.
1.
2.
3.
4.
Anna has been unsuccessfully seeking
work for over a year, and she finally
decided to give up. But, would she
take a job if there was one to take?
Anna is discouraged and not counted
in the unemployment rate.
Not counting underemployed workers
and discouraged workers causes the
official unemployment scenario to
appear lower or (better) than the
actual labor market conditions.
Why would the government not count
these people in the UR?

Draw a simple
graph of the
relationship
between
unemployment rate
& Real GDP.

UR
0
Real GDP
Draw a simple
graph of the
relationship
between
unemployment rate
& Real GDP.
Civilian Population
236,832
Employed
138,333
Unemployed
14,837
Total Civilian Labor Force
153,170
Not in the Labor Force
83,663
Discouraged Workers (subset of those
not in the labor force)
1,065
Calculate:
1. Labor force participation rate.
2. Unemployment rate.
3. Unemployment rate with discourages workers.
Civilian Population
236,832
Employed
138,333
Unemployed
14,837
Total Civilian Labor Force
153,170
Not in the Labor Force
83,663
Discouraged Workers (subset of those
not in the labor force)
1,065
Calculate:
1. Labor force participation rate. 153,170 / 236,832 =
64.7%
2. Unemployment rate. 14,837 / 153,170 = 9.7%
3. Unemployment rate with discouraged workers. (14,837
+ 1,065) / 153,170 + 1,065) =10.3 %
Employment
Scenario
Larry, a construction
worker has been laid
off and cannot find
work so he quit
looking
Brian, a college
professor, decides
not to teach summer
school
Christy, a financial
planner, was laid off
and is currently
looking for a job
Kristin lost her job so
she went back to
graduate school
because jobs are
scarce
Truly Unemployed?
Discouraged or
Underemployed?
Effect on the UR?
Employment
Scenario
Truly Unemployed?
Discouraged or
Underemployed?
Effect on the UR?
Larry, a construction
worker has been laid
off and cannot find
work so he quit
looking
YES
Discouraged
UR goes down
Brian, a college
professor, decides
not to teach summer
school
No
neither
UR not affected
Christy, a financial
planner, was laid off
and is currently
looking for a job
YES
neither
UR goes up
Kristin lost her job so
she went back to
graduate school
because jobs are
scarce
YES
Discouraged
UR goes down