Defining the Unemployment Rate

Summary

This video script explores the unemployment rate in the United States, highlighting its fluctuations since 1950, with an average of 6%. It delves into the official definition of unemployment, emphasizing the need for active job search within the last four weeks. The script explains the unemployment rate calculation, using historical data to illustrate its significance. It also teases a future discussion on potential undercounting and conspiracies surrounding the unemployment figures.

Takeaways

• 📊 The unemployment rate in the United States has fluctuated since 1950, averaging around 6% per year.
• 📉 The unemployment rate hit a low of under 3% and high points of 10.8% in December 1982 and 10% in October 2009 during economic recessions.
• 📈 Recessions are typically associated with an increase in the unemployment rate, as indicated by the shaded areas on the graph.
• 🔍 The unemployment rate never reaches zero, even in periods of economic growth, due to the dynamic nature of the job market.
• 👷‍♂️ Some firms expand while others shut down, and workers are constantly moving, entering the workforce, or seeking new jobs.
• 🏷️ The official definition of unemployment excludes individuals such as children, prisoners, and retirees, focusing on adults actively looking for work.
• 🔎 To be considered unemployed, a person must be actively seeking employment and have taken steps to find a job within the last four weeks.
• 📈 The unemployment rate is calculated by dividing the number of unemployed people by the total civilian labor force, which includes both employed and unemployed individuals.
• 📅 Historical data shows specific examples, such as February 2015 with 157 million in the labor force and 5.5% unemployment, equating to 8.6 million unemployed people.
• 📚 The script suggests further discussion on the topic in upcoming videos, indicating a series that delves deeper into the nuances of unemployment.
• ❓ The next video will address criticisms and potential undercounting of the unemployment rate, hinting at conspiracy theories or inaccuracies in reporting.

Q & A

What is the average annual unemployment rate in the United States since 1950 according to the script?

The average annual unemployment rate in the United States since 1950 is about 6%.

What were the two highest recorded unemployment rates in the United States mentioned in the script?

The two highest recorded unemployment rates were 10.8% in December of 1982 and 10% in October of 2009.

Why does the unemployment rate increase during recessions?

The unemployment rate increases during recessions because economic downturns often lead to business closures and reduced hiring, resulting in more people out of work.

Why is the unemployment rate never zero, even in a booming economy?

The unemployment rate is never zero because even in a growing economy, there is constant change with some firms expanding and others shutting down, and workers are always moving about, entering the workforce, or looking for new jobs.

What is the official definition of an unemployed person according to the script?

An unemployed person is defined as an adult, non-institutionalized civilian without a job and actively looking for work.

What action must a person take to be considered actively looking for work?

To be considered actively looking for work, a person must have taken some action to find a job in the last four weeks.

How is the unemployment rate calculated?

The unemployment rate is calculated by dividing the number of people who are unemployed by the number of people in the civilian labor force, which includes both the employed and the unemployed.

What were the numbers of the civilian labor force and the unemployment rate in February 2015 according to the script?

In February 2015, there were 157 million people in the labor force, and the unemployment rate was 5.5%.

How many unemployed people were there in January 1978, and what was the unemployment rate at that time?

In January 1978, there were 6.4 million unemployed people, and the unemployment rate was 6.4%.

What is a common criticism of the unemployment rate that will be discussed in the next video according to the script?

A common criticism of the unemployment rate that will be discussed in the next video is whether it is undercounted or if there is a conspiracy to undercount the unemployment rate.

Where can viewers find more videos and resources on this topic?

Viewers can visit MRUniversity.com to see the entire library of videos and resources on this topic.