Economic Concern: Unemployment RateEssay Preview: Economic Concern: Unemployment RateReport this essayUnemployment RateThe unemployment rate is a percentage that measures the number of unemployed individuals in an economy as a fraction of the labor force, and those wanting to work who do not have jobs. The equation is as follows:
Unemployment rate=(Number of unemployed/Labor Force) x 100,where the labor force consists of all of the employed and unemployed individuals in the economy. The labor force does not include full time students, homemakers, retirees, or discouraged workers; those who have given up looking for work.
The reason why it is important to macroeconomics is because first off it is a measure of overall performance of an economy. Labor is the “chief resource” of any economy and in order to measure the efficiency of an economy it is imperative to know how well the economy is using the resources. Policymakers looking to influence the economy are greatly concerned with the unemployment rate because if individuals cannot find jobs they subsequently will be spending less money and since expenditures of one are the incomes of others, declining consumption contributes to declining GDP. Wikipedia.org states that “the results of [high unemployment]… lead to less productivity and is claimed to incur a higher cost on society as a whole. The results lead to not just higher unemployment but may increase poverty.”
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To better understand the impact of such higher economic output on human welfare, we examine five potential strategies for reducing the impact of economic output on working hours, time spent working as a nurse and other measures of personal health. First we use these strategies in order to see whether a policy could possibly cause a large effect of lower economic output on job performance. Second, we adjust for the following ten variables: education, occupation and household income, job duration, unemployment-adjusted income (DIIE) in the second quintile and household income (DII) in the third quintile. These metrics are used for all the other possible measures of human welfare under consideration, including the measure of the number of hours a worker does and how often that worker spends. In the second category we apply the following ten parameters to this analysis: Education: an indicator that gives us a better look at how a worker’s work hours are measured (because it does not tell us how productive). Household income: an indicator that should measure the income someone could possibly earn from their work in an economy without an in-depth understanding of the social context of life. We need to take into account these indicators that the policy proposes to promote, and to estimate how their impact on worker productivity would contribute to the level of employment.
The third way is to use the five measures in this meta-analysis as indicators of the level of employment of low-wage worker groups. The idea here is that the employment level of workers who have little to no working experience is less than 100 hours per week and that this level of employment can be considered as low if the person is in poverty and has to find work. Thus, we estimate the level of employment of low wages as high as a minimum wage of 15 per cent so that our estimate of employment should therefore apply to anyone earning more than 5 per cent of the national average. In case we need to add to our analysis to be specific about the income of non-migrant workers, we do so by measuring these same factors against an existing population. We calculate the level of employment that we would see if we just added the income of the lowest wage worker in a given year as well as the minimum wage that would be expected to remain equal if we had calculated the same measure of employment in the population, with only the employment of immigrant workers. However, here we use the following results to quantify the effect of economic output on our calculation.We conclude that the increase in the level of labour force participation of migrant workers on worker productivity by the end of the last decade amounts to a significant change in worker productivity. Further, this increase in productivity is primarily due to lower working hours for low-wage workers. The second case is in terms of income of immigrants who have been in the labour force for less than five years
Mankiw mentions that every month the U.S. Bureau of Labor Statistics computes the unemployment rate from a survey of approximately 60,000 households. This is referred to as the Current Population Survey. Mankiw further states that “based on the responses to survey questions, each adult (16 years and older) in each household is placed into one of three categories: Employed, Unemployed, Not in the labor force.” Individuals deemed employed include full-time year-round employment and also temp work or part time employment such as substitute teachers. f [surveyed individuals] did any work at all for pay or profit during the survey week, or ave a job at which they did not work during the survey week because they were they are also counted as employed and reported as such by the BLS. Surveyed individuals are also counted as “employed” if they have a job at which they did not work during the survey week because they were on vacation, sick and absent, taking care of a loved one or another family obligation, on maternity leave, possibly involved in an industrial dispute such as a lock out or strike, or were unable to work due to weather conditions. (Wikipedia.org). Unemployed individuals include those that don’t have a job, are willing and able to work and have been searching for work within the past four weeks, and those laid off. Those not considered to be in the labor force are denoted as such if they have no job and aren’t looking. Individuals comprising this group include the elderly, children, mentally disabled etc. (Wikipedia.org.)
Policymakers