· Job Loss means a lower standard of living.
· A country that saves and invests a high fraction of its income may enjoy a rapid growth in its capital stock and GDP more than a country who invests less causing a higher standard of living.
· The unemployment ration in a country is another determinant of a high (low) standard of living.
· An Unemployed person is someone who is out of work but wants to work.
How is Unemployment measured?
BLS: Business of labor statistics is part of the Dept. of labor. Every month they produce data on unemployment and other aspects of the labor market. They conduct a survey of 60,000 households called the CURRENT POPULATION SURVEY: For Ages 16 and older:
CURRENT POPULATION SURVEY:
1. Employed: Includes those that worked as paid employees, worked in their own business, worked as unpaid in family business. Full time and part time is counted. This includes people who are absent from their jobs due to illness.
2. Unemployed: Includes those who were not employed but were available to work and had tried to find a job during the previous 4 weeks. They include those who are waiting to be called back to work.
3. Not in the labor force: This includes those who fit in neither of the first two categories, Like full time students, homemaker, and retirees
is the sum of the employed and the unemployed:
Labor= employed + unemployed
The normal rate of unemployment around which the unemployment rate fluctuates.
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