Self-study activity:
Watch the video and say what the following figures, words and phrases refer to.
300 million
half of us
13 million
1940
50,000 to 60,000
16
three ways
anomalies
an example of a flaw in the system
$100,000
After correcting the listening activity, explain how the unemployment rate is worked out in US in you own words.
You can self-correct the activity by reading the transcript below.
Like an economic heartbeat, the unemployment rate is one of the most closely watched indicators of the country`s financial health. So how exactly is it calculated?
Out of the more than 300 million people in America, when you take out the children, retired folks and others, the Bureau of Labor Statistics says about half of us have jobs, and another 13 million or so are unemployed.
That number does not come from the number of unemployment checks being issued, as many people imagine. Instead, every month since 1940, the federal government has conducted a survey of 50,000 to 60,000 households, asking people about their income, their race, their education and what kind of jobs they do or do not hold. Everyone over 16 is classified in one of three ways: employed, meaning that person has a job; unemployed, meaning he or she is available for work and looking for a job but cannot find one; or, three, out of the workforce, meaning this person is not seeking work. The Feds then take the math from that sample, apply it to the entire population and, voila, there is the unemployment rate.
No, of course, not. For starters there are seasonal adjustments, meaning in winter people in farming and construction may not have work for a few weeks or months. Are they really unemployed or are they employed? The same applies to people who pick up short-time jobs at the mall for the holidays, for example. Those anomalies are factored out of the unemployment rate.
But beyond that, critics complain there are basic flaws in this system. For example, if you stop actively seeking work, you’re no longer considered unemployed. That`s a problem, because in a really bad economy, a lot of folks might just give up looking for some period of time, even though they still want jobs. That could artificially lower the unemployment rate even as actual unemployment is as bad or worse than ever.
Another problem for the government, a job is a job is a job is a job. So if somebody loses a $100,000-a-year position and is now flipping burgers for minimum wage, he’s considered just as employed as he was before.
