Unemployment: how it is measured and its kinds

Grade 12 Social Studies Worksheet - Building Confidence

Circle the best answer.

1. Read this first

   Use this

   By BLS definitions, a person is unemployed if they have no job, are available for work and have looked for work in the past 4 weeks. The labor force is the employed plus the unemployed. The unemployment rate is the unemployed divided by the labor force.

3. 1.

   Ari finds the labor force of Cedar Falls. Which count is it, and why?

   • 6,000: the people with jobs, since the labor force is the group that is working
   • 6,300: the employed plus the unemployed, since the 3,700 not looking are outside it
   • 10,000: each person aged 16 and over, since each of them in the town could take a job
   • 300: the people without jobs, since the labor force is the group that needs work
4. 2.

   Bo finds the unemployment rate. Which answer fits the table?

   Use the picture in question 1.

   • 37 percent: the 3,700 people outside the labor force out of 10,000
   • 5.0 percent: 300 of the 6,000 people who hold jobs in the town
   • 3.0 percent: 300 of the 10,000 people aged 16 and over in the town
   • About 4.8 percent: 300 of the 6,300 people in the labor force
5. 3.

   In Cedar Falls 200 of the 300 unemployed stop looking for work, and nobody gets a job. Esme finds the new rate. What happens?

   Use the picture in question 1.

   • It rises above 4.8 percent, since fewer people in the town now have work to do
   • It stays at 4.8 percent, since no one found a job and so the unemployed are the same
   • It falls to about 1.6 percent because the 200 people found jobs in the town
   • It falls to about 1.6 percent, though nobody found a job: the 200 left the labor force

6. Use this

   Card A, "Kinds of unemployment" (in our words). Frictional: time spent moving between jobs or finding a first job. Structural: workers' skills or locations do not match the jobs available. Cyclical: too few jobs because the economy is weak. Card B, "BLS counting" (in our words). A person is unemployed if they have no job, are available for work and looked for work in the past 4 weeks. Others without jobs are not in the labor force. Card C, "Four people" (made up). Maya just finished school and is looking for a first job. Leo's mill closed for good and his machine skills are not wanted nearby. Ana was laid off when orders fell in a recession and expects to be rehired when sales return. Pat wants a job but stopped looking 8 months ago, sure none is out there.

7. 4.

   Kira reads card C. Which kind of unemployment is Maya's, and why?

   • Cyclical: she has no job, so the economy must be weak at this time
   • Structural: her skills do not match the jobs, since she has had no job yet
   • Neither: she is not counted, since she holds no job yet
   • Frictional: she is entering the job market and needs time to find a match
8. 5.

   Luz reads card C. Which kind of unemployment is Leo's, and why?

   • Cyclical: he lost his job because the economy was weak, so he will be rehired
   • Frictional: he is moving between jobs and will find a match in a short time, as most workers do
   • Frictional: any worker who loses a job is between jobs by definition
   • Structural: the mill is gone and his skills are not matched to the jobs nearby
9. 6.

   Milo reads card C. Which kind of unemployment is Ana's, and why?

   • Cyclical: she lost her job when a recession cut orders and expects to be rehired
   • Not any kind: she expects a recall, so she is not counted as unemployed
   • Frictional: she is looking for a new job, so her search takes time to finish
   • Structural: her factory skills are not wanted, so she will need to retrain first
10. 7.

    Noah reads cards B and C. How does the BLS count Pat, who stopped looking 8 months ago?

    • Employed: someone who stopped looking is counted as holding a job
    • Unemployed: Pat has no job and wants one, so Pat is counted in the unemployment rate
    • Unemployed: Pat looked for work in the past 8 months, so the 4-week test is met in full
    • Not unemployed: Pat has not looked in the past 4 weeks, so Pat is outside the labor force

11. Use this

    The unemployment rate is the unemployed divided by the labor force. The participation rate is the labor force divided by people aged 16 and over.

13. 8.

    Pia compares the two towns. Which statement is right?

    • The two towns have the same rate, since each has a few hundred unemployed people
    • Pine Hill's rate is higher, about 5.3 percent against 4.8 percent for Lake Ridge
    • Lake Ridge has the higher rate, since it has fewer people outside the labor force
    • Pine Hill has the higher rate because 500 is more than 300 unemployed people
14. 9.

    Ren finds the participation rate in each town. Which statement is right?

    Use the picture in question 8.

    • Pine Hill's is higher, since it has more people outside the labor force
    • Lake Ridge's is higher, about 79 percent against about 68 percent in Pine Hill
    • They are equal, since each town has a labor force of several thousand people
    • Pine Hill's is higher, since it has more people working or looking for work
15. 10.

    A caller says Lake Ridge's job market is healthier, since its unemployment rate is lower and its participation is higher. Tala tests the claim. What is the verdict?

    Use the picture in question 8.

    • Proven: lower unemployment and higher participation mean a healthier job market
    • Contradicted: a higher participation rate means more people are looking for jobs and cannot find them
    • Consistent with the table, but not proof: towns differ in age and other traits the table does not show
    • Not usable: rates from towns of different size cannot be compared