Unemployment is a key indicator of the health of an economy. It occurs when people who want to work are unable to find employment. High rates of unemployment can signal economic distress while low rates may indicate an overheated economy. There are a number of ways to measure unemployment including household labor force surveys, population censuses and unemployment insurance claims. There are also various classifications of unemployment such as cyclical, frictional and structural.
The official unemployment rate is calculated by dividing the total number of unemployed workers by the total number of workers in the labor force. This method makes it possible to compare unemployment across countries and regions. It is important to note that not all people who are unemployed are counted in the official statistics. Some people do not want to be counted because they consider themselves to be out of the labor market. This group of people is known as the discouraged workers. Other people are not officially considered unemployed because they do not actively search for work. For example Josh is looking for a job as an accountant but he works at Burger Bin to pay the bills. Josh is not officially unemployed because he is working even though he would prefer to be unemployed.
To receive unemployment benefits a person must meet the eligibility requirements set by their State and the federal government. Most States offer unemployment insurance, which is a joint state and federal program that provides weekly payments to eligible individuals for a maximum of 26 weeks. In order to qualify, a person must have lost their job through no fault of their own, be actively seeking employment and meet any additional State requirements.
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