ECON 101 of the Day: The Unemployment Rate
ECON 101 of the Day: When Trump (or any politician) claims that the official unemployment rate reported by the Department of Labor is “such a phony number,” “one of the biggest hoaxes in American modern politics” “totally fiction.” and “the biggest joke there is,” he is contextually wrong but is expressing a tiny kernel of accuracy. First, let us come to terms that in a nation of millions of people, there will be people in various states of employment. Some will have just turned 16 and thus eligible for employment. Some will be 70 and up and also eligible for employment. There may be millions and millions of people in just those two age categories. So if they aren't working, aren't they unemployed? The answer is NO. Why? Because in order to be unemployed there is a requirement that someone has to be looking for work. Certainly not all 16 year olds or 70-somethings wish to work. So in economics we call these people "out of the labor force." So there's a hint as t...