| | | | | | | Curiosity 3.1: How Is Unemployment Measured? | | | | | | | | | | Each month about 1,500 employees of the Bureau of the Census, on behalf of the the Bureau of Labor statistics (BLS), interview about 60,000 households. Each civilian household member 16 years of age or older is first asked if he or she did any work for pay during the last week, and if the answer is yes, even if it was just for an hour, that person is counted as employed. Those answering no are asked if they worked 15 hours or more without pay for a family business or farm, and if the answer is yes they are counted as employed. Those answering no are asked if they are waiting to begin a confirmed job or to be called back to a job from which they have been laid off; if the answer is yes they are counted as unemployed. Those answering no are asked if they have been doing anything to find work during the last four weeks, and if they answer yes they are counted as unemployed. The others, those who have not been looking for work (because they are students or homemakers, for example, or because they have given up hope of finding a job) are classified as not in the labor force. The official unemployment rate, sometimes referred to as U3, is calculated as the ratio of the unemployed to the sum of the employed and unemployed. | | | | | | | | | | The BLS publishes other unemployment rate measures. For example, U1 is based on those who have been unemployed for 15 weeks or longer and is intended to reflect unemployment with a more substantive financial loss. In addition to those counted in U3, U4 includes discouraged workers, measured as those who want work, have searched for work during the preceding year, and claim they have stopped searching because of a lack of suitable jobs. Finally, U6, intended to reflect potential labor resources, includes those claiming to want work but not searching (for whatever reason) and part-time workers wanting full-time work. In January 1999, U1 was 1.1%, U3 was 4.8%, U4 was 5.0%, and U6 was 8.5%. The gap between U3 and U4 is usually about two percentage points, but shrinks during booms (as is the case for 1999) and widens during recessions. | | | | | | | | | | In addition to these overall rates of unemployment, information on a variety of characteristics of the unemployed is reported. For example, in 1998 the unemployment rate was 4.5 percent overall but 4.4 percent for males, 4.6 percent for females, 16.2 percent for males aged 16-19, 12.9 percent for females aged 16-19, 3.9 percent for whites, and 8.9 percent for blacks. About 50 percent of the unemployed had lost their job, 32 percent were reentrants to the labor force, 12 percent were job leavers, and 6 percent were new entrants. About 45 percent had been unemployed for less than 5 weeks, 29 percent for 5-14 weeks, 12 percent for 15-26 weeks, and 26 percent for longer than 26 weeks. | | | | | |
| | | | | The creation of jobs is determined by the demand for the goods and services we produce, in turn affected by prices charged and government policies, among other things. This topic is discussed in later chapters. The growth of the labor force is affected by population growth and changes in the participation rate, the percentage of the civilian noninstitutional population aged 16 and over in the labor force, currently about 67 percent: | | | | |
