The Labor Force Participation Rate

Questions: 1. The table below reports some labour market figures for a hypothetical country, Blefuscu in 2005. Assume that there are only two types of employment: full time and part time. Everyone who is not employed is unemployed. Calculate the Labour force participation and ii) unemployment rate. Show all your calculations. Population 15,000,000 Working age population 12,900,000 Number of people Not in the labour force 100,000 Part-time employment as a percentage of total 18% employment Number of full-time employees 4,953,000 Rate of underemployment 40% 2. The government of Blefuscu announces that the unemployment rate fell from 2005 to 2006. The government says this is positive news as it shows more jobs are being created and less people are unemployed. The labour unions, on the other hand, disagreed with this assessment and stated that they could find no evidence that additional jobs have been created between 2005 and 2006. Your task is to explain how the unemployment rate can fall even if there are no new jobs being created. First, using the numbers you have been given in 1A as the 2005 figures, fill in the table below by developing a set of numbers that show how the unemployment rate can fall even if there are no new jobs being created. Assume no change between 2005 and 2006 in the population, percentage of part time workers and working age population. Second, discuss in detail how the numbers show the unemployment rate can fall even if there are no new jobs being created. List two possible reasons why this may occur. Year 2005 2006 Population 15,000,000 15,000,000 Working age population 12,900,000 12,900,000 Number of people Not in the 100,000 Part-time employment as a 18% Number of full-time 4,953,000 Rate of underemployment 40% ___% Answer: (1). The Labor Force Participation rate is calculated by getting the total number of the labor force and then dividing it by the number of all the adults in an economy who are willing to work. However, adults who are still in college or university are excluded from the calculations. This is because they may not have the time to work either part time or full time. In the given figures, the number of the working population is 12,900,000 and the labor force is 12,800,000 (less the people who are not in the labor force 100,000), and number of adults/population is 15,000,000. Therefore, the rate expressed as a percentage is 85.33%. Labor force 12,800,000 Number of adults 15,000,000 Labor force Participation Rate 85.33% Unemployment rate is arrived at by adding up all the jobless people and then dividing that number by the labor force. In the given figures, the number of unemployed people or they are not in the labor force are is 100,000 and those who are in the labor force are in the working age population is 12,900,000. Therefore, the unemployment rate is 0.77% for Blesufcu. Unemployed people 100,000 Labor force 12,800,000 Unemployment Rate 0.78% (2). In an article by Boundless (2016), unemployment is not a complete computation and therefore it is likely to be faulty and be partial concerning the gathering of information in addition to irregularity in coverage. For instance, the rate of unemployment does not keep in mind people who may not be aggressively in search of jobs, including students who go to learning institutions or still, people who are in jail. Also it does not consider folks who are disabled and may desire to join the labor force, as well as individuals who toil for a short time and search for engagements full-time. Besides, a few people decide not to engage in some sort of unemployment and these figures are not measured. Because of failing to incorporate every person without a job in the computation of the job loss rate, the computation fails to give a precise measurement of the brunt of joblessness in a community. The prevalent fault in how various government agencies measure the rate of unemployment regards individuals who are vaguely termed to be jobless. The fundamental conjecture of overlooking them is that they are unemployed because they may perhaps not be interested in finding a job. Nevertheless, additional studies disagree with the conjecture. Research demonstrates that several individuals deemed to be unemployed truly would like an employment opportunity; they have merely quit searching because of they were not victorious in getting posts. Consequently, the rate of unemployment belittles the figure of citizens who would enjoy toiling for a salary other than they are not yet in gainful undertakings. An additional limitation of unemployment rate is that it does not differentiate occasional workers and the fully employed. Several folks reckoned as working by various government agencies are occasional employees who desire to be employed fully. Part-time employment hardly ever offers reimbursements or sufficient wages to pay for living costs. A working population consisting of a big figure of occasional employees, thus, cannot be deemed as strong. The phenomena in Blefuscu of the drop in the unemployment rate can be explained by the reasons above. Moreover, the rate of job losses can be misleading if a few factors are considered. Year 2005 2006 Population 15,000,000 15,000,000 Working age population 12,900,000 12,900,000 Number of people not in the labor force 100,000 86,000 Part-time employment as a percentage of total employment 18% 20% Number of full time employees 4,953,000 4,967,000 Rate of unemployment 40% 0.67% The table above shows the labor market statics for the hypothetical country, Blefuscu. The unemployment rate fell in 2006 and therefore the number of people not in the workforce dropped to 86,000. In addition, the unemployment rate fell because majority of the new workers opted for part time jobs, thus the percentage of them increased to 20%. Those who went for full time employment increased by a small margin to 4,967,000; the labor force summed up to 12,814,000 people and the jobless lot lessened to 86,000. In 2006, the unemployment rate was 0.67%. Although we have noted that this rate may not be ultimate rate. 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