ECON 1200 1st Edition Lecture 17- THE 3 CATEGORIES OF EMPLOYMENT:o Employed—someone who worked during the previous week or was temporarily absent from their job because of vacation, illness, strike, or bad weather (includes people working on their own, or their family business, both full-time and part-time workers, andpeople who are UNDEREMPLOYED UNDEREMPLOYED—people working significantly below skill-level or working fewer hours than desiredo Unemployed—someone who did not work during the previous week, but was available for work and ACTIVELY looked for work during the previous four weeks (includes people on temporary layoffs)o Not in the Labor Force—Someone who did not work during the previous week and did not actively look for work during the previous four weeks (includes; retirees, homemakers, students, prisoners, people in the military, disabled or institutionalized people who are unable to work, and discouraged workers Discouraged workers—people who are available for work but have not looked for a job during the previous four weeks because they believe no jobs are available for them- The BLS uses the survey data to compute the labor force, the labor force participation rate, and the unemployment rate, and the unemployment rate, making statistical adjustments for regular seasonal changeso Labor Force—The sum of employed and unemployed workers in the economyo Labor Force Participation Rate—The percentage of the working age population in the labor forceo Labor Force Participation Rate Equation—(Labor force/working age population)*100%- An economy’s labor force participation rate reflects the amount of labor available to an economy, the larger the economy’s production possibilities and the higher the economy’s real GDP per capita- Unemployment Rate—The percentage of the labor force that is unemployedo Equation—(#unemployed people/ labor force)*100%These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.o The unemployment rate reported by the BLS is a good indicator of how easy or difficult itis to find a job under current economic conditions, but it is not a perfect measure of joblessness One problem is that the BLS categorizes underemployed workers as employed and discouraged workers as not in the labor force- If instead, these workers were considered to be unemployed, then the unemployment rate reported by the BLS understates the true degree of joblessness in the economy- This is a substantial problem during and immediately following