- December 1, 2020
380-150=230 The size of the labor force is 230 million people.
b. 23/230=0.1 230-23=207
The unemployment rate is 10% and the employment rate is 90%.
c. One shortcoming of the conventional employment rate is that it doesn’t account for a shrinking labor force. In fact as the labor force shrinks, so long as the shrinkage is due to dropout by discouraged labor force, then the unemployment rate appears to shrink even though in reality, the number of employed remains the same and there are fewer potential job holders within the economy.
2.a. The unemployment rate in the US is 3.9% currently according to the chart. This means that among those in the labor force, 96.1% have jobs or have worked within the past four weeks. As far as unemployment rates go, that’s a strong level of employment.
In Sweden, there is a 6.4% unemployment rate, higher than the US but still within a relatively healthy level of labor. 93.6 % are employed. However, it is impossible to make an objective comparison between countries based solely off employment rates.
In China the unemployment rate it 3.9% which is the same as the US. It’s better than Sweden but again we cannot make an objective comparison. They seem to have stable performance.
Overall, each of these countries is seen as first world countries ( China still may be second world but it is a growing force), and their economic performances seem to be relatively stable with certain growth currently.
b. US: Labor force participation rate: 62.9%
Employment to population ratio: 60.4%
Collective bargaining coverage rate: 11.5%
Employees working more than 48hrs: 13.5%
Mean weekly hours: 37 hours
Sweden: Labor force participation rate:73.2%
Employment to population ratio: 68.5%
Collective bargaining coverage rate: 90%
Employees working more than 48hrs: 4.3%
Mean weekly hours: 36 hours
China: Labor force participation rate: 71%
Employment to population ratio: N/A
Collective bargaining coverage rate: 40.6%
Employees working more than 48hrs: N/A
Mean weekly hours: 46 hours
C. US men: Labor force participation rate: 69.1%
Employment to population ratio: 66.3%
US women:Labor force participation rate: 57.1%
Employment to population ratio: 54.9%
Sweden men: Labor force participation:75.5%
Employment to population:70.7%
Sweden women: Labor force participation:70.8%
Employment to population rate: 66.3%
China men: Labor force participation: 78.2%
Employment to population:N/A
China women:Labor force participation:63.7%
Employment to population: N/A
3. While the president has correctly identified the data on unemployment, he omits statistics on the labor force which has shrunk overall. Additionally, the female labor force participation is a touchy subject in this country especially with the glass ceiling and gender norms on a woman’s role in the household and labor environment.
4.a. Labor productivity rises then the real wage rises since the profit margins have to be reasonable between employer and employee.
b. As competition increases, real wage decreases due to price cuts.
c. If labor force participation increases, the real wage will fall as the unemployed section grows.