10. Discouraged workers The table that follows contains U.S. employment i from J

Question

10. Discouraged workers The table that follows contains U.S. employment i from January 2011. Population (16 years old and over) 238,704,000 Employed 139,323,000 13,863,000 Unemployed 993,000 7,659,300 The Bureau of Labor Statistics has several measures of joblessness in addition to the official unemployment rate. One alternative is the U-6 measure of labor underutilization, which is calculated as follows: (Unemployed+ Marginally Attached+ Involuntary Part-Time) (Employed Unemployed +Marginally Attached) U-6 x 100% Fill in the table that follows by calculating the official unemployment rate and the U-6 measure of labor underutilization Official Unemployment Rate U-6 Measure of Labor Underutilization The official unemployment rate and joblessness in the economy. Excluding discouraged workers from the official unemployment rate may cause the official rate totatethe true extent of underemployment. the U-6 measure of labor underutilization are two different measures of understate 2013 Cengage Learning except as noted. All rights reserved.

Explanation / Answer

Official Unemployment rate =unemployed / Employed + Unemployed * 100

13863000 / 139,323,000 + 13,863,000 * 100 = 13863000 / 153,186,000 * 100 = 9.05 per cent.

U 6 measure of labor underutilization = 13,863,000 + 993,000 + 7,659,300 / 153,186,000 + 993,000 * 100 = 22,515,300 / 154,179,000 * 100 = 14.60 per cent

Understate as official unemployment rate is lower than U6 measure of labor utilization

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