Between January 2010 and January 2016, U.S. employment...

Name: Problem 4, Chapter 28: Principles of Economics
Uploaded: 2019-06-14T04:00:12-08:00
Duration: 2 min 16 s
Channel: Yi Chun Lin
Description: Between January 2010 and January 2016, U.S. employment increased by 12.1 million workers, but the number of unemployed workers declined by only 7.3 million. How are these numbers consistent with each other? Why might one expect a reduction in the number of people counted as unemployed to be smaller than the increase in the number of people employed?

Between January 2010 and January 2016, U.S. employment increased by 12.1 million workers, but the number of unemployed workers declined by only 7.3 million. How are these numbers consistent with each other? Why might one expect a reduction in the number of people counted as unemployed to be smaller than the increase in the number of people employed?

Between January 2010 and January 2016, U.S. employment increased by 12.1 million workers, but
the number of unemployed workers declined by only 7.3 million. How are these numbers consistent with each other? Why might one expect a reduction in the number of people counted as unemployed to be smaller than the increase in the number of people employed?

Key Concepts

Discouraged Workers

Discouraged workers are individuals who have stopped searching for jobs because they believe no work is available for them. Since they are not actively looking for employment, they are not counted in the unemployment statistics. This phenomenon can lead to a situation where employment increases significantly while the number of unemployed declines by a smaller margin.

Labor Force Participation

Labor force participation measures the percentage of the working-age population that is either employed or actively seeking employment. A decline in this rate means that some individuals who are not working are also not actively looking for work, causing the number of people counted as unemployed to decrease even if they are not employed.

Unemployment

Unemployment is defined as the segment of the labor force that is without work but actively seeking employment. The key aspect of this definition is that to be counted as unemployed, a person must be actively looking for jobs, meaning that those who stop searching are not included in the unemployment statistics.

Employment

Employment refers to individuals who are currently holding paid jobs, whether as wage earners, salaried employees, or self-employed. An increase in employment indicates that more people have gained jobs over time, which can include both new entrants to the labor market and individuals transitioning from unemployment or out of the labor force.

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