Unemployment Trends - Video Tutorials & Practice Problems

Unemployment Trends:Age and Race

So some interesting trends emerge. When you analyze the unemployment rate in the US. Let's check out some of those common trends. So the first thing we're gonna do is analyze by race and by age here. Okay, so the first one we have is adults and teenagers. Their unemployment rate here on the left column and their labor force participation rate on the right column. So it it separates between white and black for both categories. And we can make two conclusions here. The first one we see is that african americans tend to have a higher unemployment rate uh even though they have similar labor force participation rates. Now, why is that? Look, let's focus here on the adults notice that they have very similar labor force participation and remember labor force participation? This is um labor force divided by adult population um where unemployment rate is unemployed divided by labor force. Okay, so unemployed is the people who are looking for work but can't find jobs, right? So they're part of the labor force, but they can't find jobs where the labor force participation rate is for how many of them are actually included in the labor force. So why are african americans tending to have a higher unemployment rate? Well, the most likely explanation is that there's still lingering institutionalized racism throughout the job market. So a lot of, a lot, a lot of times people will actually hire whites instead of blacks. And there's even been studies done where people will send in fake resumes with a more black sounding name and have less callbacks just because of the name on the resume. So it's likely that a lot of times these unemployment rates is because people tend to hire whites more often than blacks. Okay. And that's what we see happening here, right? Where we have the white male and female having a lower unemployment rate than the black male and female right there. Okay. The next one we come up with from this, this uh this data is that teenagers, how does the teenage unemployment rate look compared to adults? Let me erase those there. So you would probably logically expect that teenagers tend to have higher unemployment as well, right, teenagers have higher unemployment rates than adults as well, and that's for multiple reasons. First, they have low labor participation rates, right? Because not all teenagers are looking for work where more likely that an adult is going to be looking for work than a teenager, teenagers are still in school, so they don't always have to be looking for a job. Um So there's less labor force participation from teenagers, but again, teenagers have difficulty finding jobs. A lot of places are skeptical to hire teenagers for multiple reasons. Right? So teenagers are gonna have difficulty securing jobs compared to their adult counterparts. So that those are two conclusions we can come to from from this data here is that african americans tend to have higher unemployment rates and teenagers also tend to have higher unemployment rates. Cool, let's pause here and let's move on to the next graph.

Unemployment Trends:Gender

Alright, so this next graph is really interesting as well. It shows the labor force participation of men and women over time. So what we're gonna see what, what can we definitely tell from the graph is that women have been joining the labor force, women have joined the labor force overtime while men have left the labor force over time. There's less men in the labor force comparatively. Uh since since the 19 fifties here and more women in the labor force since the 19 fifties. So why is this convergence happening here between the two? Well, it's generally easy to explain the increase of women in the workforce, right? Because in the 1950s a lot of women were homemakers, there was less women in the workforce in general, but that changed over time. Over time, more women have been going to college, more women have been participating in the labor force, especially since the 1970s. You can see this this uh steeper increase in the women in the labor force there. But what about men? Why are men leaving the labor force? What partially is because men are staying in school longer. So the longer you spend in school, you're not included in the labor force, even though you're in the adult population getting master's degrees, doctorates, uh spending a lot more time in school. So staying in school longer keeps you out of the labor force. People are having longer retirements, longer retirements. So if you're living longer, right, if you're living longer you're going to be an adult for a longer time and not included in the in the labor force, although you are an adult and you're just retired and now sometimes men are taking over the homemaker role. So more women are employed. There are men that are the homemakers, right? Men can be the homemakers now as well. We're back in the 1950s. That was a lot less likely. Okay. Um, so that's kind of explains away why some of these trends have been changing over time and it continues to be that way. We see that women are more and more likely to be going to college and men in the other direction are are less likely to go to college over time as well. So let's go ahead and take a pause here and we'll look at one more graph on the next

Unemployment Trends:Business Cycle

So we've discussed this before, but it's nice to see it on a graph. What we have here is the unemployment rate over time. And what's marked in purple. These purple sections, just like we've seen on other graphs are recessions. So what do we have? What are we noticing happening during all of those purple sections on the graph, those recessions, we see unemployment rate increasing significantly, right? We see it going up during this, all of the recessions, we see unemployment rate going up, unemployment rate up up, right. All of them show this increase in unemployment. And why is that? Remember when we studied the three types of unemployment, cyclical, structural and frictional unemployment? Which one is this related to? Well, this is the business cycle, right. The recessions are part of the business cycle and this is due to cyclical unemployment. So what happens during a recession? We're gonna go over the business cycle and a lot of details. But just logically when you think about a recession, what's happening, we're having lower demand for goods and services, people aren't spending money as much anymore. There's a lack of demand, a lack of production and it leads to increased unemployment. Uh Companies don't need to be producing their products as much because nobody's buying them. So it leads to layoffs and this cyclical unemployment. So a big takeaway from this class, one of the big takeaways is always gonna be that during recessions unemployment increases, that's always gonna be true here, and that's exactly what we see going on in all of these situations. Okay cyclical unemployment uh increases during these recessions. Let's go ahead and take a pause and move on to the next video.