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.)
Because jobs can serve the needs of our neighbors and lead to human flourishing both for the individual and communities, they are the most important part of a morally functioning economy. Workers dropping out of the labor force because they’ve grown discouraged is therefore one of the most pressing moral and economic issues in America today. Sadly, it is also one of the most overlooked.
Today, the Republicans on the Senate Budget Committee released some stats showing the shocking decline in the male participation in the labor force, particularly men between the ages of 25-54:
According to the committee members:
A recent report from the CBO contains an appendix detailing updated estimates of the labor market effects of the Affordable Care Act (ACA). Pundits for and against the ACA have wasted no time in putting their own particular spin on the projections. Republicans and some other opponents have seemingly celebrated the idea that these estimates may show that the ACA is “a job-killing, economy-crushing villain,” while Democrats and some other supporters have claimed that in times of high unemployment, it’s “an economic benefit” that some will be voluntarily reducing hours or dropping out of the labor force because that means greater demand for labor — those currently unemployed would therefore have more options.
So who’s right? These are mutually contradictory claims, or so it appears. The report is ultimately limited and mixed, but nevertheless raises some serious concerns, caused, in part, by the polarization of Congress both when the law was passed and up to the present. (more…)