The way unemployment is measured is controversial, and some say that the way it is calculated may not be a entirely reliable, and is not a true measure of employment.
Unemployment is typically measured through national household surveys or labor force surveys, which are conducted by the Bureau of Labor Statistics.
The surveys ask a sample of individuals questions about their employment status, work hours, and earnings. Based on the responses, the survey calculates various measures of unemployment, including the overall unemployment rate and rates for different demographic groups.
The most widely used measure of unemployment is the unemployment rate, which is defined as the percentage of the labor force that is unemployed but actively seeking employment and willing to work. The labor force consists of all individuals who are employed or unemployed but actively seeking employment.
Those who are not in the labor force, such as individuals who are retired, disabled, or discouraged from seeking work, are not counted as unemployed. This is where many people say the calculation falls short and does not tell the whole story about the state of employment in the US.
There are various types of unemployment, including frictional unemployment, structural unemployment, and cyclical unemployment, each of which is related to different underlying economic factors.
In our next several posts, we’ll talk about the different types of unemployment and why they are relevant to today’s economy.
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