How the Unemployment Rate is Defined and Computed

Natural Resources Defense Council Environmental Integrity Project February 2004 S WIMMING IN SEWAGE The Growing Problem of Sewage Pollution and How the Bush Administration Is Putting Our Health and Environment at Risk Project Design and Direction Nancy Stoner, Natural Resources Defense Council Michele Merkel, Environmental Integrity Project Principal Author and Researcher Mark Dorfman, MSPH NATURAL RESOURCES DEFENSE COUNCIL ii ABOUT NRDC The Natural Resources Defense Council is a nonprofit environmental organization with more than 1 million members and online activists. Since 1970, our lawyers, scientists, and other environmental specialists have been working to protect the world’s natural resources and improve the quality of the human environment. NRDC has offices in New York City, Washington, D.C., Los Angeles, and San Francisco. Visit us on the World Wide Web at www.nrdc.org. ABOUT EIP The Environmental Integrity Project is a nonpartisan, nonprofit organization established in March of 2002 to advocate for more effective enforcement of environmental laws. The organization was founded by Eric Schaeffer, former director of the U.S. Environmental Protection Agency’s Office of Regulatory Enforcement, with support from the Rockefeller Family Fund and other foundations. Visit us on the World Wide Web at www.environmentalintegrity.org. ACKNOWLEDGMENTS NRDC and EIP wish to acknowledge the support of The Morris & Gwendolyn Cafritz Foundation, The Davis Family Trust for Clean Water, Geraldine R. Dodge Foundation, Inc., Peter R. Gimbel and Elga A. Gimbel Memorial Trust, The Joyce Foundation, The McKnight Foundation, Charles Stewart Mott Foundation, Prince Charitable Trusts, Mary Jean Smeal Fund for Clean Water, The Summit Fund of Washington, Turner Foundation, Inc., and Victoria Foundation, Inc. We also thank our more than 550,000 members, without whom our work to protect U.S. waters, as well as our other wide-ranging environmental programs, would not be possible. The authors wish to thank Sarah Meyland, Nelson Ross, and Diana Dascalu for their research and writing contributions; Albert Slap, Katie Danko, Tom Neltner, Shelly and Louis Villanueva, Felicia Coleman, and DeeVon Quirolo for reviewing case studies; Stephen Weisberg, Laurel O’Sullivan, Hillary Hauser, and David Senn for reviewing and commenting on the final draft; and Carol James for her assistance throughout the project. Thanks also to Rita Barol, Julia Cheung, and Bonnie Greenfield for their assistance producing this report for NRDC’s website. NRDC President John Adams EIP Director Eric V. Schaeffer NRDC Executive Director Frances Beinecke Copyright 2004 by the Natural Resources Defense Council and the Environmental Integrity Project Swimming in Sewage iii TABLE OF CONTENTS Executive Summary v Chapter 1: Context 1 Chapter 2: Health and Environmental Impact 5 What’s in Raw Sewage and How It Can Affect Your Health 5 The Prevalence of Diseases Linked to Sewer Overflows 18 Chapter 3: Economic Impact 21 Costs Associated with Sewer Overflows 22 Chapter 4: Case Studies 27 Hamilton County, Ohio 27 The Anacostia River, Washington, D.C. 31 Indianapolis, Indiana 35 Florida Keys 39 Malibu, California 43 Michigan 46 Milwaukee, Wisconsin 50 Chapter 5: Recommendations 57 Increase Federal Funding for Wastewater Infrastructure 57 Enforce Current How the Unemployment Rate is Defined and Computed How the Unemployment Rate is Defined and Computed By: OpenStaxCollege Unemployment is typically described in newspaper or television reports as a percentage or a rate A recent report might have said, for example, from August 2009 to November 2009, the U.S unemployment rate rose from 9.7% to 10.0%, but by June 2010, it had fallen to 9.5% At a glance, the changes between the percentages may seem small But remember that the U.S economy has about 155 million adults who either have jobs or are looking for them A rise or fall of just 0.1% in the unemployment rate of 155 million potential workers translates into 155,000 people, which is roughly the total population of a city like Syracuse, New York, Brownsville, Texas, or Pasadena, California Large rises in the unemployment rate mean large numbers of job losses The increase from 5% in April 2008 to 10% by November 2009 meant an additional 7.75 million people were looking for jobs but could not find them The Bureau of Labor Statistics tracks and reports all data related to unemployment Who’s In or Out of the Labor Force? Should everyone without a job be counted as unemployed? Of course not Children, for example, should not be counted as unemployed Surely, the retired should not be counted as unemployed Many full-time college students have only a part-time job, or no job at all, but it seems inappropriate to count them as suffering the pains of unemployment Some people are not working because they are rearing children, ill, on vacation, or on parental leave 1/9 How the Unemployment Rate is Defined and Computed The point is that the adult population is not just divided into employed and unemployed A third group exists: people who not have a job, and for some reason—retirement, looking after children, taking a voluntary break before a new job—are not interested in having a job, either It also includes those who want a job but have quit looking, often due to being discouraged by their inability to find suitable employment Economists refer to this third group of those who are not working and not looking for work as out of the labor force or not in the labor force The U.S unemployment rate, which is based on a monthly survey carried out by the U.S Bureau of the Census, asks a series of questions to divide up the adult population into employed, unemployed, or not in the labor force To be classified as unemployed, a person must be without a job, currently available to work, and actively looking for work in the previous four weeks Thus, a person who does not have a job but who is not currently available to work or has not actively looked for work in the last four weeks is counted as out of the labor force Employed: currently working for pay Unemployed: Out of work and actively looking for a job Out of the labor force: Out of paid work and not actively looking for a job Labor force: the number of employed plus the unemployed Calculating the Unemployment Rate [link] shows the three-way division of the over-16 adult population In 2012, 63.7% of the adult population was “in the labor force;” that is, either employed or without a job but looking for work Those in the labor force can be divided into the employed and the unemployed These values are also shown in [link] The unemployment rate is not the percentage of the total adult population without jobs, but rather the percentage of adults who are in the labor force but who not have jobs: Unemployment rate = Unemployed people Total labor force × 100 2/9 How the Unemployment Rate is Defined and Computed Employed, Unemployed, and Out of the Labor Force Distribution of Adult Population (age 16 and older), 2012 The total adult, working-age population in 2012 was 243.2 million Out of this total population, 142.4 million were classified as employed and 12.5 million were classified as unemployed The remaining 88.3 million were classified as out of the labor force As you will learn, however, this seemingly simple chart does not tell the whole story U.S Employment and Unemployment, 2012(Source: www.bls.gov) Total adult population over the age of 16 243.2 million In the labor force 154.9 million (63.7%) Employed 142.4 million Unemployed 12.5 million Out of the labor force 88.3 million (36.3%) In this example, the unemployment rate can be calculated as 12.5 million unemployed people divided by 155.0 million people in the labor force, which works out to an 8.1% rate of unemployment The following Work It Out feature will walk you through the steps of this calculation Calculating Labor Force Percentages So how economists arrive at the percentages in and out of the labor force and the unemployment rate? We will use the values in [link] to illustrate the steps To determine the percentage in the labor force: 3/9 How the Unemployment Rate is Defined and Computed Step Divide the number of people in the labor force (154.9 million) by the total adult (working-age) population (243.2 million) Step ...and Other Contrarian Football Thoughts KC Joyner ESPN’s Football Scientist “When I found that the research proved that a signifi cant portion of the big-name players weren’t nearly as good as they were touted as being by many members of the media and NFL coaches, I knew that I was onto something.” —KC Joyner When sportswriters and commentators toss around superlatives as easily as quarterbacks toss short passes, how do you distinguish the hype from the facts? How can you get beyond the publicity and propaganda to objectively assess actual on-fi eld fi performance? How do you refute conventional football wisdom? You run the numbers. But wait; time-out. As this book laments, you can’t get access to game footage, which is one of the reasons so many myths and misconceptions about pro football persist. Fortunately, KC Joyner (a.k.a. ESPN’s “Football Scientist”) does have the fi lms—and the numbers. fi Joyner is pro football’s premier game-tape analyst, using game fi lm to track, tabulate, and analyze nearly fi every measurable statistic in an NFL game. Now he shares it all with you in Blindsided , as he examines dd and debunks some of the game’s biggest myths and legends. He analyzes stats for various positions, players, and teams as well as offering surprising insights into key football issues and concerns that range from the true value of the left tackle to who should or shouldn’t be in the Hall of Fame. He discusses coaching and coaches at length. He delves into their background demographics, classifi es them into four strategic/philosophical fi alignments, and explores their impact on the past and future of the game. 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Jacket Photograph: © Corbis “This book will change the way you think about professional football—in much the same way that Bill James revolutionized the analysis of Major League Baseball. The research is impeccable. The approach is irreverent. You will be ‘blindsided’ by what you think you know about the NFL, but don’t. Warning to fantasy football lovers: You won’t be able to put this book down.” —Sal Paolantonio, ESPN reporter and author of The Paolantonio Report: The Most Overrated and Underrated Players, Teams, Coaches, and Moments in NFL History “KC Joyner’s theories will completely revolutionize football, cure baldness, save the whales, and bring total peace and harmony to all nations. That’s why you must read Blindsided !” —Gregg Easterbrook, ESPN’s Tuesday Morning Quarterback “Too much of football literature is just tedious hagiography, but Blindsided is a book for those of us who enjoy the complex game on the fi eld and football conversation that goes past ‘my team CRS Report for Congress Prepared for Members and Committees of Congress Economic Growth and the Unemployment Rate Linda Levine Specialist in Labor Economics January 7, 2013 Congressional Research Service 7-5700 www.crs.gov R42063 Economic Growth and the Unemployment Rate Congressional Research Service Summary A persistently high unemployment rate is of concern to Congress for a variety of reasons, including its negative consequences for the economic well-being of individuals and its impact on the federal budget. The unemployment rate was 9.5% when the economy emerged from the 11 th postwar recession in June 2009. It climbed further to peak at 10.0% in October 2009. The rate has slowly declined since then. Although it dropped below 8% in the fourth quarter of 2012, the unemployment rate remains high by historical standards. After most postwar recessions, it took at least eight months for the unemployment rate to fall by one full percentage point. The slowest decline occurred following the 2001 recession’s end, when the unemployment rate was a comparatively low 5.5%. About 3½ years elapsed before the rate fell just one-half of one percentage point. In contrast, the recovery from the severe 1981-1982 recession began with the highest unemployment rate of the postwar period (10.8%). In that instance, it took only eight months for the rate to fall over one percentage point. Some hoped the unemployment rate would fall as quickly after the 2007-2009 recession, but the speed of improvement has been more typical of the so-called jobless recoveries from the 2001 and 1990- 1991 recessions. What appears to matter for a reduction in the unemployment rate is the size of the output gap, that is, the rate of actual output (economic) growth compared with the rate of potential output growth. Potential output is a measure of the economy’s capacity to produce goods and services when resources (e.g., labor) are fully utilized. The growth rate of potential output is a function of the growth rates of potential productivity and the labor supply when the economy is at full employment. If potential output growth is about 2.5% annually at full employment, then the growth rate in real gross domestic product (GDP) would have to be greater to yield a falling unemployment rate. How much greater will determine the speed of improvement in the unemployment rate, according to a rule of thumb known as Okun’s law. In its August 2012 economic forecast, the Congressional Budget Office (CBO) estimates that the annual average growth rate of real GDP will gradually approach the growth rate of potential output over the 2012-2022 projection period. As a result of this slow narrowing of the output gap, the unemployment rate is forecast to 5.9% by 2017. Economic Growth and the Unemployment Rate Congressional Research Service Contents The Relationship Between Growth and Unemployment 1 The Unemployment Rate During Postwar Recoveries 3 The Outlook for the Unemployment Rate in the Next Few Years 6 Tables Table 1. Months Between the Start of a Recovery and Two Successive Declines in the Unemployment Rate 4 Contacts Author Contact Information 7 Economic Growth and the The Unemployment Rate Introduction The unemployment rate became a hot topic in the past few months when it rose to 3.5 per cent, a recent high for almost 10 years. The jobless rate was higher than the 3.2 per cent unemployment rate recorded in the May to July period. The underemployment rate in the June to August period rose to 2.5 per cent from 2.3 per cent in the May to July period. Until recently, most workers who lost their jobs were from the manufacturing sector. They were middle-aged factory workers with few skills and little education. But in recent months a large number of employees have been laid off in the retail and restaurant businesses. Unemployment has spilled over to the service sector from manufacturing sector. Hong Kong is facing a prolonged economic downturn. The high unemployment rate has raised many social and economic problems. For example, the number of people who commit suicide is increased. It is because more people had lost their jobs for a long time. It is a serious threat to the lives of the poor. The unemployed people may also feel that it is unmeaningful to live. As a result, they will commit suicide to solve the problem. Moreover, the high unemployment rate results in the increase of the rate of crime. There was an unemployed man who stole rice because he was too hungry and he did not have money to even buy food! We can know how serious the unemployment rate is. By the way, higher unemployment rate causes lower purchasing power of people. A lot of kinds of business are affected. Many people lose confidence in economics of Hong Kong. They do not believe unemployment will be improved. Some say that the Government should provide immediate assistance for the jobless. Some also say unemployment is due to the attraction of cheap labor across the border. The Government can no longer play the role of a bystander. All of these above show the influence of the unemployment. In spite of how many people who have talked about the topic of unemployment, everyone will be concerned about this topic. The following sections will analyze this hot topic. Reasons for unemployment in Hong Kong 1. Faster growth in total labor supply relative to that of total employment In 1993 and 1994, the increase in Hong Kong labor force is 2.9% and 3.5% respectively. At the end of 1993, the total labour supply is 2 970 000. Change in the total labour supply is determined by the population growth, total employment and the emigration condition. If the population growth and the total employment is stable, the extra labour supply will increase the total labour supply. This extra labour supply are mostly from the influx of illegal immigrants from China, imported labour ( 30,000 ), hiring of expatriates ( net increase is 40,000 from 1992 to 1994 ) and the returnees from overseas. Thus, the supply of labour is greater than the demand and gives pressure on employment. From March to May of 1995, the total labour supply had risen 4.4% but the total employment had just increased 3.6%, so this aggravated the unemployment rate. However, this is just a superficial reason. The following reasons can explain the reason of unemployment in a deeper way. 2. Change in the economic structure The economic structure in Hong Kong has changed from labour intensive to high technology and large capital intensive. Also, it changes from manufacturing oriented to service oriented industries. 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We will use the values in [link] to illustrate the steps To determine the percentage in the labor force: 3/9 How the Unemployment Rate is Defined and. .. of the labor force Using the above data, what is the unemployment rate? These data are U.S statistics from 2010 How does it compare to the 2012 unemployment rate computed earlier? 7/9 How the Unemployment. .. Unemployment Rate is Defined and Computed The unemployment rate is defined as the number of unemployed persons as a percentage of the labor force or 14.8/153.9 = 9.6% This is higher than the 2012 unemployment