The article, “Broader Unemployment Rate Ticks Up” that was published in The Wall Street Journal on 3rd May 2013, and written by Phil Izzo provides background on why the rate of unemployment in the United States dropped in April 2013. Izzo (2013) asserts that the overall rate of unemployment in the country declined for all the right reasons during the month. However, the article similarly outlines that the number of discouraged and underemployed workers increased during the same month. He states that this is a significant indicator of the type of employment opportunities that are being created.
Izzo (2013) elaborates that the decline in the main rate of unemployment was the result of a rise in the number of people who consider themselves employed. A concurrent development was, however, a decline in the population of the unemployed. The author explains that the rate of unemployment is a factor of those who are out of work, are available for work opportunities, and have actively sought such opportunities in the previous four week period. The bracket described as “actively seeking work” is quite large. It includes people who made contact with employers, employment agencies, friends or job centers. It also consists of those who signed up for prospective employment opportunities and circulated their resumes. The rate of unemployment is this determined by dividing the population of the unemployed by the total of those who are gainfully employed.
Izzo (2013) explains that the population of the unemployed reduced by at least eighty thousand during April. At the same time, the labor force experienced a rise, since more people were recruited into gainful employment. The population of the employed also rose by almost three hundred thousand. The total growth in the labor force was roughly two hundred thousand. This growth did not, however, have an impact on the participation rate of the labor force, which was steady at 63.3%. The article elaborates that this constant rate is a reflection of the fact that those who qualify for employment are motivated enough to seek such opportunities, and it is a positive sign. It also increases the possibility that those who have been out of work for long periods have not given up on the prospect of landing employment.
The author observes that the Labor Department’s “U-6” classification of data experienced a rise from 13.8% to 13.9% (Izzo, 2013). This classification is inclusive of both those who are unemployed, as well as a category he describes as “workers who are marginally attached.” These are those who are neither employed nor are they seeking employment. They, however, assert that they are seeking employment opportunities and have engaged in job-searching in the recent past. This category also includes those who are in part-time employment for reasons that can be blamed on the prevailing economic conditions. In summary, these are people who sought full-time jobs, but owing to their inability to land such opportunities, settled for part-time jobs because that is all that was available.
Izzo (2013) expounds that the “U-6” rate rose during April 2013, since the population of workers seeking full-time employment but was only able to land a part-time job, rose. At the same time, the number of work-hours reduced for all workers. As such, the article draws attention to the fact that the type of jobs being created should be examined (Izzo, 2013). Besides, the ability of these jobs to boost the rate of economic recovery should be assessed.As outlined by Izzo (2013), the National Unemployment Rate is the number of adults within the labor force, who are not employed, presented as a percentage. As such, this statistic is arrived at by dividing the number of the unemployed by the total of the labor force, multiplied by one hundred. Large increases in the rate of unemployment are an indication of the massive loss of jobs.
The Rate of Unemployment is always expressed as a percentage. For a country with a large population such as the United States, even small changes in the National Unemployment Rate are usually significant. For instance, the state has a population of around one hundred and fifty million people who are either in employment or are seeking jobs. Therefore, an increase or decline in the National Unemployment Rate by just 0.1% is an indicator of the fact that one hundred and fifty thousand people have either landed employment opportunities or have lost their jobs (Izzo, 2013).
The Rate of Labor Force Participation is the total population that is on standby for work opportunities, presented as a percentage of the people in total. It is an indicator of the labor potential that a particular economy has – this is a crucial factor in productivity. The other essential factors alongside the Rate of Labor Force Participation in so far as economic productivity is concerned are entrepreneurship, capital, and natural resources (Izzo, 2013). The Rate of Labor Force Participation is arrived at by dividing the Labor Force by Total Civilian Population. It implies that those who are institutionalized are not included in this population. The Labor Force is determined by adding the population of the Employed to that of the Unemployed. The Labor Statistics Bureau routinely updates the definition of relevant terms in the calculation of this figure. Therefore, it is crucial to refer to their description to arrive at the correct numbers.
Finally, the Employment to Population Ratio is a ratio that relates the total labor force to those who fall within the working age. It is determined by first determining the entire population of individuals who are employed, and therefore, fall within the labor force. Afterward, this figure is divided by the total population. Izzo (2013) outlines that by the end of April 2013, the number of people who needed better jobs in the United States was almost ten million. At the same time, nearly twelve million Americans remained unemployed. It is despite being qualified for employment opportunities. The National Rate of Unemployment, the Employment to Population Ratio, and the Labor Force Participation Rate were all crucial in determining these statistics. Compared with several other metrics, this ratio (employment to population) is usually not as impacted as short-term fluctuations or seasonal variations within the labor marketplace. As an outcome, it is frequently deemed a more suitable job growth or shrinkage indicator than the number of jobs in particular.
Overall, the rate of unemployment refers to the labor force share, which is jobless, articulated as a percentage. Employment rates are lagging indicators, implying that they generally fall or rise in the wake of the changing economic situations, instead of expecting them. As such, jobs are limited when the national economy is in pitiable shape; hence, the rate of employment is expected to increase and vice versa.
Izzo, P. (2013, May 03). Broader unemployment rate ticks up. Retrieved January 23, 2019, fromhttps://blogs.wsj.com/economics/2013/05/03/broader-unemployment-rate-ticks-up-2/
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