How Is Unemployment Calculated?

Any country has to ensure that their civilians are having opportunities to get stable income for each family. When the rate of unemployment is unbearable, a person, his family, and the society as a whole lose and suffer. The government has the responsibility to ensure that that its citizens have an adequate income to support families and dependents. When this is not achieved, purchasing powers of workers are lost. Thus, the country’s GDP (gross domestic product), an indication of a country’s economic strength, will also decline. GDP represents the number of goods produced being ably purchased by consumers.

Unemployment rate is calculated through surveys and measures in statistics duly performed by the Bureau of Labor Statistics under the Department of Labor. These surveys are conducted early each month and all results get wide coverage in media. A Current Population Survey sample form is used to measure the extent of unemployment in the country. Usually, an estimate of 60,000 households is included in a survey that may involve about 110,000 individuals. The design of this survey covers many specifications with regards to as how a household and state or city is chosen.

Since the survey is done every month, one-fourths of the households are changed to ensure that no household is surveyed more than four succeeding months. After four consecutive months, a select number of households are left for 8 months, after which they will be interviewed again for the same 4 calendar months one year after. After that, those households will not be surveyed ever again. This results to about 75% of the subjects remaining the same form month to month and about 50%  from year to year. About 2,200 surveyors from the Census Bureau interview households for:

1.    Holding of jobs
2.    Seeking of jobs
3.    Non-labor force status of household members

People who are counted as unemployed are those who do not have a job, actively looking for a job in the four previous weeks, and are currently available for work. This means a household member should be contacting employers, employment agencies, friends, relatives, or university employment centers of job vacancies. He must be having means to be actively searching for jobs.