Worksheet 12.1: Unemployment Rates

Transcription

1 Worksheet 12.1: Unemployment Rates A. Appledale has 32,000 full-time residents including 4,000 residents either retired or are too young to work. Of the total, 15,000 residents are employed full time while 8,000 work part time. The town has 2,000 residents not currently working but looking for work. The remaining residents have given up looking for work. 1. What is the size of Appledale s labor force? 2. What is Appledale s employment rate? 3. What is Appledale s unemployment rate? 4. What percentage of the population are discouraged workers? B. Now suppose a new factory opens in Appledale that hires 1,000 workers, half of those hired had previously given up looking for work. 5. What is the new size of Appledale s labor force? 6. What is Appledale s new employment rate? 7. What is Appledale s new unemployment rate? 8. What percentage of the population is now considered discouraged workers?

2 Copyrighted Material - Do Not Post Answers Online Worksheet 12.1: Unemployment Rates Answer Key A. Appledale has 32,000 full-time residents including 4,000 residents either retired or are too young to work. Of the total, 15,000 residents are employed full time while 8,000 work part time. The town has 2,000 residents not currently working but looking for work. The remaining residents have given up looking for work. 1. What is the size of Appledale s labor force? 15, , ,000 = 25, What is Appledale s employment rate? 23,000 / 25,000 =.92 x 100 = 92% 3. What is Appledale s unemployment rate? 2,000 / 25,000 =.08 x 100 = 8% 4. What percentage of the population is discouraged workers? 3,000 / 32,000 =.094 x 100 = 9.4% B. Now suppose a new factory opens in Appledale that hires 1,000 workers, half of whom had previously given up looking for work. 5. What is the new size of Appledale s labor force? a. 16, , ,500 = 25, What is Appledale s new employment rate? a. 24,000 / 25,500 =.941 x 100 = 94.1% 7. What is Appledale s new unemployment rate? a. 1,500 / 25,500 =.059 x 100 = 5.9% 8. What percentage of the population are now considered discouraged workers? a. 2,500 / 32,000 =.078 x 100 = 7.8%

3 Worksheet 12.2: Unemployment After watching Episode 18: Unemployment video found at answer the following questions. 1. What does it mean to be unemployed? 2. What is the formula to count the unemployment rate? 3. Who are some people who are not part of the workforce? 4. What are the two categories of workers who are counted in the labor force?

4 Copyrighted Material - Do Not Post Answers Online Worksheet 12.2: Unemployment Answer Key After watching Episode 18: Unemployment video found at answer the following questions. 1. What does it mean to be unemployed? The unemployed are people willing and able to work and searching for work. 2. What is the formula to count the unemployment rate? # of unemployed # in the labor force 3. Who are some people who are not part of the workforce? People under the age of 16, people who are institutionalized, those serving in the military, those who choose not to be in the labor force are not part of the workforce. 4. What are the two categories of workers who are counted in the labor force? The two categories that are counted are: 1) You are employed 2) You are not employed, but are actively looking for work

5 Exit Slip: Module If a country has a working-age population of 200 million, 135 million people with jobs, and 15 million people unemployed and seeking employment, then its labor force is: A. 335 million. B. 200 million. C. 155 million. D. 150 million. E. 135 million. 2. Donna was laid off by her employer at the beginning of She looked for a job for three months, but could not find anything suitable. She then decided to volunteer for a soup kitchen. Donna is considered to be A. unemployed. B. underemployed. C. a discouraged worker. D. a part time worker. E. employed. 3. In general, economic expansions are characterized by: A. increasing rates of unemployment. B. decreasing rates of unemployment. C. decreasing employment. D. unchanged rates of employment. E. unchanged rates of unemployment.

6 Copyrighted Material - Do Not Post Answers Online Exit Slip: Module 12 Answer Key 1. If a country has a working-age population of 200 million, 135 million people with jobs, and 15 million people unemployed and seeking employment, then its labor force is: A. 335 million. B. 200 million. C. 155 million. D. 150 million. E. 135 million. (D) 2. Donna was laid off by her employer at the beginning of She looked for a job for three months, but could not find anything suitable. She then decided to volunteer for a soup kitchen. Donna is considered to be A. unemployed. B. underemployed. C. a discouraged worker. D. a part time worker. E. employed. (C) 3. In general, economic expansions are characterized by: A. increasing rates of unemployment. B. decreasing rates of unemployment. C. decreasing employment. D. unchanged rates of employment. E. unchanged rates of unemployment. (B)

7 MODULE 12: THE MEANING AND CALCULATION OF UNEMPLOYMENT In-Class Presentation of Module and Sample Lecture Suggested time: This module should be covered in one hour-long class. I. The Unemployment Rate A. Defining and Measuring Unemployment B. The Significance of the Unemployment Rate C. Growth and Unemployment I. The Unemployment Rate A. Defining and Measuring Unemployment Note: it might be interesting to find the latest monthly employment report and bring relevant tables into the class to show the students how these statistics are presented by the Bureau of Labor Statistics (BLS). The BLS narrows the population by categorizing only those citizens above the age of 16 who are not institutionalized (not in prisons, the Armed Forces, etc). The population is then divided into three groups: those who are working at least one hour per week (Employed) those who were not working at least one hour, but were actively seeking work in the past four weeks (Unemployed) and those not in labor force, The Labor Force(LF) = Employed + Unemployed Two important measures can then be derived. labor force participation rate: the percentage of the working - age population that is in the labor force, is calculated as follows: LFPR% = 100*(LF)/(civilian population 16 and older) Unemployment rate: the percentage of the labor force that is not employed. UR% = 100*(# unemployed)/(# Labor Force) B. The Significance of the Unemployment Rate Note: Remind the students of the business cycle that shows the ebb and flow of the macroeconomy. Discuss what is happening when the economy is weakening. This is also a good opportunity to review the circular flow model., Module 12 Page 1

8 Example of a recession: Firms are producing less output because consumers are buying fewer products. With fewer customers, firms need fewer workers. As workers are laid off, the unemployment rate begins to rise. So a weakening economy shows up as a rising unemployment rate. But the UR is not a perfect measure of the true strength or weakness of the labor market and economy. Example: The economy is weak and Jim has had his hours cut from 40 per week to 10. Jim is still employed, but he has certainly seen a decrease in his weekly income. Terri has a Master s degree, but can only find work as a barista in a coffee shop. She is also employed, but not in a job that matches her skills. The unemployment rate will not capture these forms of underemployment. Example: Jerome has been unsuccessfully seeking work for nearly a year, and finally decides to give up. People like Jerome are classified as discouraged workers and are not counted as unemployed, they are out of the labor force. The presence of underemployed workers and discouraged workers causes the official unemployment rate to appear lower (better) than the actual labor market conditions. Note: you can find the number of discouraged workers in the BLS reports. Show the students what happens to the UR when you add discouraged workers to the ranks of the unemployed. C. Growth and Unemployment Note: ask the students to construct a graph with real GDP on the x-axis and the unemployment rate on the y-axis and draw a curve that might show how these two macro measures are related. If they have read the chapter, this will not be much of a challenge, but a good thought experiment anyway. Have the students think about what the curve should look like. Again, you can relate this to the circular flow model. Students should draw a downward sloping function. The instructor can now refer the students to the same scatter graph in the text. Note that the growth rate of real GDP is on the horizontal axis and that growth rate can be negative, but unemployment rates cannot. Even when the economy is very strong, the unemployment rate is not zero., Module 12 Page 2