Note: This is the latest entry in the Acton blog series, “What Christians Should Know About Economics.” For other entries in the series see this post.
The Term: Unemployment
What it Means: If you consult a dictionary, you’ll find a number of commonsensical definitions for unemployment: the state of being without a job; being without a paid job but available to work, etc. But like many other economic terms, the dictionary definition can vary significantly from how the term is often used. For example, since your teenage daughter, your neighbor’s stay-at-home spouse, or your retired grandfather are without a job, are they considered “unemployed”? In each case the answer is the same: It depends.
According to the federal government, to be unemployed a person must (a) be jobless, (b) looking for a job, and (c) available for work.
People are considered employed if they have a job (whether temporary, part-time, etc.). People who are neither employed nor unemployed are considered to be not in the labor force.
In America, the labor force consists of all persons 16 years old and over who are not serving on active duty in the military and are not confined to institutions such as nursing homes and prisons and either have a job or are looking for work. The labor force is made up of both the employed and the unemployed.
So unemployment refers to anyone who doesn’t have a job, wants one and is available to work, and is actively looking for work. That last part is particularly important because “discouraged workers” are not counted as unemployed. (See below for more on discouraged workers.)