Labor Force from the Household Survey - Essay Example

PART I Questions on the Labor Force from the Household Survey What was the official unemployment rate reported for January and the total number of unemployed workers?  Official unemployment rate for January 2013 7.9% Total number of unemployed workers 12,332,000How many people worked part-time for economic reasons (involuntary part time workers)?  Part-time for economic reasons 7,973,000How many people were marginally attached to the labor force?  Marginally attached to the labor force 2,443,000How many were discouraged workers?

 Discouraged workers 804,000How many people were classified as long term unemployed – unemployed for 27 weeks or more?  Unemployed for 27 weeks and over 4,708,000What were the unemployment rates by each level of educational attainment? January 2013 January 2012Less than High School diploma 12.0 13.1 High School diploma 8.1 8.4Some college or associate degree 7.0 7.2Bachelor’s degree or higher 3.7 4.2The January 2013 unemployment rates across the various levels of educational attainment are lower than the equivalent rates for January 2012.

This development shows that more jobs have become available and that more of the country’s unemployed have taken jobs by January 2013.What was the labor force participation rate in January 2013?  Jan 2013 labor force participation rate 63.6% How has this rate changed from January 2003?  The labor force participation rate in January 2003 is 66.4%. This means that a bigger percentage of the country’s population aged 16 or higher was in the labor force in January 2003. The difference between the two rates is computed at 2.8.Questions on Payroll jobs from the Establishment SurveyHow many (seasonally adjusted) payroll (non-farm) jobs were created in January 2013 from the previous month?

 Total non-farm jobs created in Jan 2013 119,000 How many jobs were added or lost specifically in each of the following major industry categories from May – June 2012? 1. manufacturing  11,0002. construction  2,0003. professional and business services  47,0004. financial services  5,0005. government  -4,0006. Education and health services  2,000 7. temporary help services  25,2008. government?  (same as #5)PART II1. Which one of the six measures of unemployment represents the official measure used by the Bureau of Labor Statistics?

 The official unemployment rate is “U-3 Total unemployed, as a percent of the civilian labor force”.2. By how much did this official measure change from January 2012 to January 2013?  January 2012 January 2013 7.9% Difference3. Of all of the measures in the table - U1 through U6 - which one shows the greatest decline (use seasonally adjusted data) from January 2012 – January 2013? As shown in the following table, U1 and U6 show the greatest decline from January 2012 to January 2013.

MeasuresJan 2013Jan 2012Increase (Decrease)U14.24.9(0.7)U24.34.7(0.4)U37.98.3(0.4)U48.48.9(0.5)U59.39.9(0.6)U614.415.1(0.7)Source: Bureau of Labor Statistics website 4. If marginally attached workers, discouraged workers, and those who are working part-time for economic reasons were included in the official unemployment rate, what would that rate have been for January 2013?  The rate for January 2013 would have been 14.4%.Which of the six measures reflects this rate?  U6 reflects the rate that includes persons marginally attached to the labor force and those who are employed part-time for economic reasons in generating the unemployment rate.

Discouraged workers form part of the marginally attached workers.PART III1. What do the authors - Bivens, Fieldhouse and Shierhoz – identify as the main reasons for continuing stagnant economic growth since the onset of the ‘Great Recession’ in 2008?  According to the authors, the main reason for the continuing stagnant growth of the U.S. economy lies in the “ongoing and scarcely improving shortfall in aggregate demand relative to the supply of productive resources”. (Bivens, Fieldhouse & Shierholz 2013) Consumption of produced goods and services have decreased since the onset of the ‘Great Recession’ in 2008. 2. The authors discuss the issue of the relationship between strong GDP growth and a strong recovery.

What does their argument suggest about the relationship between strong GDP growth, the deficit and reducing unemployment? The authors’ argument suggests that budget deficit reduction results to decelerated GDP, which, in turn, translates to higher unemployment and underemployment rates. The austerity measures implemented to reduce budget deficits leads to less economic activities, less jobs, less production of goods and services, less demand from the consumers, and, ultimately to a lower GDP.

Lower GDP requires less labor. More and more plants and factories will operate below their full capacity and will lay off more workers to cut costs and survive the economically difficult times.3. According to Bivens, Fieldhouse and Shierholz, what would it take to return to a full recovery?  According to the authors, achieving full employment will bring in economic recovery. Full employment can be attained by boosting the consumers’ demand for goods and services produced by the country as the initial step toward narrowing the output gap – the difference between what the economy can produce and its actual output.

Most importantly, the government’s support will be crucial. As estimated by the authors, about $1.5 trillion to $2.2 trillion worth of fiscal provision over the next three years will be necessary to accomplish the targeted shrunk output gap, which will generate full employment and will lead to economic recovery. 4. After having read the article and having researched the employment and unemployment data here, what would you conclude about the reasons for weak economic growth since the official end of the recession?

 I conclude that the employment situation has to be addressed to foster robust economic growth. The government has to decisively act to save jobs that are about to be lost and to generate more. Employment rates must significantly improve or people will earn less and less. With decreased household income, consumers are bound to avoid spending. Meanwhile, businesses will refuse to expand their operations and banks will refuse to lend out more cash as a result of the ongoing slowdown of business transactions.

Thus, the output gap that is supposed to be dealt with will widen. With more resources unused for the production of goods and services, GDP growth will falter and the U.S. economy will take a long time to fully recover.