Economics

Economics

Answer No.1

The term labor force participation refers to the percentage of working-age persons in an economy who are wither employed or either unemployed and searching for a job. The labor force participation rate in the United States is usually around 67-68% (Weber, 2011).

A decline in the Labor Force Participation Rate is shown by the Bureau of Labor Statistics data under President Obama.  The rate dropped from January 2009 to September 2012 from 65.7% to 63.6%. The chart below clearly illustrates the decline during President Obama's time in office, and it can easily be observed that the job situation turned out to be worse under his leadership.



The labor force participation rate from January 2008 to January 2012 dropped by 2.5 percentage point. The main cause of decline is people not entering or dropping out the labor force due to weak prospect of jobs. When these sidelined workers start entering or reentering into labor market, then the unemployed rate will rapidly come down (Weber, 2011).

It was repeatedly warned by economists till the end of 2012 that economic growth could be harmed by the fiscal-cliff standoff and could cause a recession. High rate of unemployment badly affects the economic condition of the nation (Harley, 2006).

It is entitled in a recent report by economist Dean Maki at Barclays Capital that in recent years the decline in the labor force participation rate has caused the unemployment rate to minimize (Harley, 2006).

Answer No.2

The official unemployment rate is estimated and reported on a monthly basis by the Bureau of Labor Statistics (BLS) of the U.S. Department of Labor. It uses data which is acquired by the Current Population Survey. The BLS is responsible for making monthly estimation of employment, unemployment, and labor force status of over 200 million people (Weber, 2011).

Answer No.3

A Discouraged worker is defined as a person who is eligible of being employed and capable of doing work but is currently unemployed and not in search of work for last four weeks. Usually discouraged workers are disappointed of getting a job as they are not successful in finding a suitable job for themselves according to their skills, education and interest. There are few discouraged workers who are actually voluntarily unemployed (Harley, 2006).

Since discouraged workers are no more interested in job searching so they are not considered as active labor force. It shows that unemployment rate which is based on calculations of labor force, do not count discouraged ...