This is the last video about the Labor Market. Here we put together the Wage Setting and the Price Setting curves to get the equilibrium (or natural) unemployment rate of the economy. This will help us see what happens when an exogenous shock affects the Labor Market. For example, when the government increases labor protection, or when there is a boost in productivity or increase in the level of competition in the economy.

The next step, after reviewing the basic ISLM model will be to get into the Medium Run ASAD framework. Because the key to get to the medium run and see how prices change is the Labor Market, as interpreted by our Ws/Ps model.

The NAIRU will be an add on to the model of this video, but I will dedicate a whole section to it.

What Is the Real Unemployment Rate?

In which John Green discusses the “real” unemployment rate in the United States, and how different ways of calculating jobless rates have led to vastly different conclusions about the health of the U.S. economy. SOURCES BELOW!

Other questions addressed include: What is the difference between the U1 unemployment rate and the U6 unemployment rate? Which one is the better measure of unemployment? What percentage of Americans are employed? And what percentage of those unemployed are looking for work? And what does it all say about the present and future of the U.S. economy, and our divisive political discourse? Thank you to Rosianna for all the charts and graphs! http://youtube.com/rosianna

The information in this video came from:

1. Trading Economics has great and visually intuitive explanations of the U-3 unemployment rate over time in the United States: http://www.tradingeconomics.com/united-states/unemployment-rate

2. BLS stats about labor force participation rates and how many people out of the labor force say they “do not want a job now” https://www.bls.gov/web/empsit/cpseea38.htm

3. Information about the civilian labor force participation rate can be found here: https://fred.stlouisfed.org/series/CIVPART and the labor force participation rate for those between 25 and 54 can be found here: https://fred.stlouisfed.org/series/LNU01300060

4. This is a highly detailed article that I found helpful looking at causes of the decline in labor force participation: https://econsnapshot.com/2016/02/11/understanding-the-decline-in-us-labor-force-participation/ An easier to read overview at the Washington Post: https://www.washingtonpost.com/news/wonk/wp/2013/09/06/the-incredible-shrinking-labor-force-again/?utm_term=.0a056f64b354

5. Real median household income in the United States is, after adjusting for inflation, rising but not yet to pre-recession levels: https://fred.stlouisfed.org/series/MEHOINUSA672N

6. This article explores how we try to have internationally comparable unemployment rates: https://stats.bls.gov/opub/mlr/2000/06/art1full.pdf

7. This web site has an easy-to-use interface that allows you to look at the U-3, U-5, and U-6 unemployment figures over time: http://www.macrotrends.net/1377/u6-unemployment-rate

8. This has up-to-date figures all unemployment measures (including U-1 and U-2, which aren’t discussed in this video): http://www.cnbc.com/2016/08/05/charts-whats-the-real-unemployment-rate.html

I think that’s it. If you have any specific questions, let me know and I’ll try to add sources here.

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