Thursday, May 9, 2013


The truth about unemployment rates is that there are many ways to measure it. This is also something I believe the government takes advantage of. This is also why I believe the real problem of unemployment to be underreported. The problem is knowledge, people don't know what specifically the criteria is to counting unemployment. This problem can easily be solved by looking at the government definitions of unemployment. The definition given by the website for the Federal Researve of San Francisco states "To be classified as unemployed in the CPS people must satisfy two primary criteria: (i) they must have no job and (ii) they must be actively seeking employment.  Those who do not have jobs and are not actively searching are considered to be out of the labor force." What about those who do not fit these categories such as those who have been unemployed for  two years and can not find a job? Well, technically speaking they do not make the cut. They are not factored in at all. Basically what I am saying is that those who have been unemployed for years are not counted in the new unemployment rates. The ones who have just recently become unemployed and are actively searching for new jobs are. This is all found at Federal Reserve Bank of San Francisco website. 

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