Archive for the ‘Labor’ Category

The unemployment rate is calculated by dividing those unemployed by the work force.  However, people that are unemployed but not looking for work, those who were looking for work but have given up, and institutionalized peoples are not considered part of the work force, and therefore are not considered to be unemployed.

I think that the definition of institutionalized peoples needs to be revised because I think that those serving active duty in the military should be included in unemployment figures.  I believe this for various reasons.  Those serving on active duty are able bodied people capable of doing work.  Suppose that, with our current conflicts in the Middle East, foreign policy changed and all active duty troops were brought home and discharged.  All of these active duty discharged would then be included in unemployment figures.  For this reason, I think that unemployment figures might be representing the actual employment situation.  So why not include them in unemployment figures now?

Currently there are about 1.5 million serving active duty for the United States.  The number of people in the work force in June was about 154 million and about 14 million were unemployed (http://www.bls.gov/news.release/empsit.t09.htm and http://www.bls.gov/news.release/empsit.t10.htm).  This means the unemployment rate in June of this year was about 9%.  Suppose the 1.5 million active duty were added to these figures (provided that they were still serving).  The new unemployment rate would be slightly lower, but of negligible change.  If all these active duty were put out of work, the new unemployment rate would be almost 10%.


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