Chapter 21: Problem 15

What criteria do the BLS use to count someone as employed? As unemployed?

Short Answer

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The Bureau of Labor Statistics (BLS) considers individuals employed if they meet the following criteria during the survey reference week: (1) worked at least one hour as a paid employee or worked as an unpaid worker in a family-run business for 15 or more hours, or (2) were temporarily absent from their jobs due to various reasons but had a job to return to. Individuals are considered unemployed if they are without a job, actively looking for work within the past four weeks, and currently available for work. Those not working and not actively seeking employment are classified as not in the labor force.

Step by step solution

Understanding the Labor Force

The labor force includes individuals aged 16 years and older who are either employed or unemployed. The BLS classifies people into these categories based on a series of criteria, which are used to measure the health of the US labor market.

Criteria for Employed Individuals

According to the BLS, individuals are considered employed if they meet the following criteria during the survey reference week: 1. Worked at least one hour as a paid employee. This includes individuals working part-time. 2. Worked as an unpaid worker in a family-run business for 15 or more hours. 3. Were temporarily absent from their jobs due to illness, vacation, bad weather, or labor disputes, but still had a job or business to return to.

Criteria for Unemployed Individuals

Individuals are considered unemployed if they meet the following criteria during the survey reference week: 1. They are without a job and actively looking for work within the past four weeks. Active job searching includes sending out job applications, attending job interviews, or other activities aimed at finding employment. 2. They are currently available for work. This means that they could start a job if one was offered to them. 3. They are not temporarily absent from their job, as in that case, they would still be considered employed.

Not in the Labor Force

Apart from the employed and unemployed, there is another group of individuals classified as not in the labor force. These individuals are not working and are not actively seeking employment. They could be full-time students, retirees, stay-at-home parents, or disabled persons who cannot work, among others. By understanding these criteria, it is clear how the BLS classifies someone as employed or unemployed, which is crucial to keeping track of the labor market's performance.

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