Unemployment
In the light of the ongoing financial morass that is affecting the United States and most of the countries across the globe, the event that an individual has been terminated, laid off or lost his employment due to the companies folding is not an uncommon scenario. With the global crisis seen to be far from over, many Americans will probably be out of work for a considerable amount of time. But a number of Americans have taken this opportunity to establish their own businesses or be self employed. How is this data interpreted as good or bad news in the light of the global credit crisis will be the topic of the paper.
Odd Jobs a summary
News that there are Americans finally out of the unemployment market and finding means to support themselves is indeed welcome news to recession weary Americans. But the point in the article is that thought there are Americans finally finding work, is the amount of jobs being generated enough In the recent Employment Situation Summary, it was shown that the American economy, one of the largest in the world, added only 1,000 payroll employment opportunities in December. What was declared was that the unemployment levels fell a paltry .2 percentage points from the figures a month back, from 5.9 percent falling to 5.7 in November (Daniel Gross, 2004). Is the formulas for determining unemployment the same
Methods of determining unemployment
In the report of the Bureau of Labor Statistics, the figures for unemployment is gathered by the use of two formulas. In the Establishment poll, the method collects data in a direct mode from the 400,000 companies, and then estimates the number of Americans on the payrolls of the companies. In the other method, the Household poll, which is based on the data given by 60,000 homes, this formula will show the number of working Americans, the difference of the two formulas creating the statistics on the rate of unemployment. The Household poll would show the actual number of Americans that are employed, working as a result of being self-employed or have become entrepreneurs as a result of being laid off, something that the Establishment, or payroll, survey would not show since the latter would not show the number of entrepreneurs or self employed Americans (Gross, 2004).
The Need for an Alternative Formula
The statistics used in the number of those who are working, information on the employed and the unemployed are arrived at using the same principles used in determining the national figures from the Current Population Survey (New York State Department of Labor 2010). The statistics shown in the Household survey do not reflect the numbers in the non farm numbers that are based on the information from the monthly Current Employment statistics poll (New York, 2010). In the use of the Household poll data, the equation also gives out other information, inclusive of the alternative measures of labor underutilization (Gross, 2004), crafted to examine the labor market from another viewpoint (Carola Cowan, 2009). It has been discovered that not all angles can be seen with the use of one particular statistics hence the Bureau of Labor Statistics has come up with six measures of underutilization, to be known as U-1 to U-6 (Cowan, 2009). The definitions for each category is seen in the table below
In the measurement of the total of employed and unemployed, the variations during the year display not only the prevailing weather patterns that repeat every year, but the trends in hiring and lay-offs that attend events such as the winter holidays or summer. To address the variations, seasonal adjustments are used to reconcile the differences the changes in employment on a per month basis , inclusive of the seasonal patterns and the dynamic economic conditions (United States Department of Labor-Bureau of Labor Statistics). In the definition of the International Labor Organization, or ILO, the following graph can be used as the definition and the means of calculating the unemployed