1. Chapter 6 homework Don’t forget homework due Friday… Questions 6, 10, 14, and 16

2. Chapter 7 Unemployment and Employment

3. What are the numbers?? **Find the most current you can** Federal Unemployment Rate Pennsylvania Unemployment Rate Montgomery County Unemployment Rate  4.6% January 2007  4.6% December 2006  3.7% September 2006

4. Defining the Labor Force The civilian labor force is comprised of individuals who meet all of the following criteria:  Are at least 16 years old  Are not in the armed services  Are not incarcerated or otherwise institutionalized  Have a job or have looked for work in the last four weeks

5. Characterizing Employment Status Anyone who is in the labor force and working is employed. Anyone who is in the labor force and not working is unemployed.

6. Figure 7.1 The U.S. Labor Force in 2004

7. The Labor Force Participation Rate Percentage of the population that is working or actively seeking work. Are you part of the labor force?  NO!!

8. Changing Face of the U.S. Labor Force Since 1970, the labor force participation rate of women has grown steadily.  Between 1970 and 2004, the labor force participation rate of women increased from about 43% to about 60%. Better education for women More divorces Less discrimination  The labor force participation rate for men fell over this period. Are men getting lazy?

9. Changing Face of the U.S. Labor Force (cont’d) Between 1970 and 2004, the number of African Americans in the labor force increased by 78%. The number of Hispanics in the labor force increased from about 6 million in 1980 to more than 19 million by 2004.  Before 1970 the BLS didn’t even separate out Hispanics in the data collection  too few  Increase mostly due to increases in immigration Estimated that 1/6 of Hispanic residents entered the U.S. since 1990

10. Figure 7.2 The Changing Pattern of Employment

11. Counting the Unemployed The Bureau of Labor Statistics (BLS) is the government agency that collects data on prices, workers compensation and employment.  Data on employment and unemployment are collected monthly through the Current Population Survey. A survey of a random sample of about 60,000 households

12. Counting the Unemployed (cont’d) People are considered employed if:  They have a job.  They worked at least 15 hours per week without pay in a family business.  They are temporarily away from work due to illness, accident, or strike.

13. Counting the Unemployed (cont’d) People are considered unemployed if:  They are in the labor force but don’t have a job.  They are waiting to start a new job.  They are waiting to be recalled from a temporary layoff.

14. The Civilian Unemployment Rate The civilian unemployment rate ( u ) is the percentage of the civilian labor force that is unemployed:

15. The Civilian Unemployment Rate (cont’d) The unemployment rate gives economists a good overall picture of the status of the labor market. Which has a higher unemployment rate?  1989 where 8.5 million people were unemployed and 115 million were employed  1935 where 7.8 million people were unemployed and 44 million were employed 1935!!!  1989 = (8.5)/(8.5+115) = 0.0688 = 7%  1935 = (7.8)/(7.8+44) = 0.1506 = 15%

16. The Civilian Unemployment Rate (cont’d) Individual unemployment rates are also calculated  Different characteristics of the population such as age, race, educational attainment, ethnicity, and gender.  Teenagers, minorities, and high school dropouts have higher unemployment rates than others do. Why would this be important?