Unformatted text preview: Unemployment Concerns
in the Economy
By Kimbra Dunn Introduction With the economy constantly growing, many concerns arise with
such growth. The most controversial concern with the economy
is employment. Employment is when households supply labor to
firms which pay wages in return. Unemployment when
households supply more labor than is demanded by the firms.
The unemployment rate is the most commonly used measure of
unemployment. It is the percentage of workers in the labor force
who do not have a job (SUO2015). References Mankiw, N. G. (01/2014). Principles of Economics, 7e, 7th Edition.
[VitalSource Bookshelf Online]. Retrieved from
https://digitalbookshelf.southuniversity.edu/#/ books/9781305217171 http://www.bls.gov/home.htm Labor Force Participation Rate Labor force participation rate is the percentage of working age
persons in an economy who are employed and unemployed but
looking for a job. As of October 2015, the United States labor
force participation rate is 62.4%. For the same month in 2008,
the amount of United States people working or seeking
employment is 66.4%. This is a 4.4% decrease in seven year.
This doesn’t necessarily mean that the unemployment rate is
increasing nor that the economy is getting worse. The decrease
of the labor force participation rate just means that there is an
increase in of retired men and women, students, or discouraged
workers. Measuring the Unemployment Rate These procedures are developed using statistical models that
incorporate current and historical data from the current
employment statistic programs (CES) The use of regular state unemployment insurance systems (UI) The third procedure used to determine and measure the
unemployment rate is the quarterly census of employment and
wages program (QCEW), where the UI systems and the decennial
census is used to create estimates of employment and
unemployment. Discouraged Workers These are the individuals without jobs that is not actively seeking
a job nor has been in the past four weeks. (SUO2015). The unemployment rate does not count discouraged workers
because they are not active in the labor force. The exclusion of discouraged workers in the unemployment rate
enables inaccurate data to be released. The unemployment rate
released does not offer the complete picture of the health of the
United States economy. Types of Unemployment Frictional unemployment is the results of taking time to search
for the jobs that best suit their skills (Mankiw, N. G. 01/2014). Structural unemployment is the result of the number of jobs
available in the labor market is insufficient (Mankiw, N. G.
01/2014). Cyclical unemployment is when workers lose their jobs due to
the economic circumstances (Mankiw, N. G. 01/2014). Unemployment Insurance The unemployment insurance (UI) system helps many people
who have lost their jobs by temporarily replacing part of their
wages. This may help the unemployed but also discourage them from
seeking employment. This is because people respond to
incentives. Unemployment benefits stop once an individual takes a new job.
This may cause the unemployed to devote less effort to job
seeking and/or decline an unattractive job offer. Unions A union is a worker association that bargains with employers
over wages, benefits, and working conditions (Mankiw, N. G.
01/2014). If a unions raises the wages of some employees, they reduce the
quantity demanded for labor. This will cause some individuals to
experience unemployment. Making this inequitable because
some workers benefit on the expense of other workers.
Ultimately hurting the economy. . In an extreme case a “company town” where a single firm
controls the hiring, the workers have to take what the firm is
offering. Which may be extremely bad. Unions come in to help
these workers get paid what they deserve. ...
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