Thursday, February 19, 2015

Brief historical look at US unemployment rate

What is unemployment? Who is considered unemployed? As is often the case, it's a matter of definition. Economists and the government considered someone unemployed if he or she is:
  • Age 16 or older
  • Seeking employment
  • Not currently employed.
So a person under 16 can never be unemployed according to this definition. Nor can someone with a job who is looking for a better or different job. And a person who is over 16, not working, but not actively looking for work is not considered unemployed. This might include:
  • Retired
  • Disabled
  • Military
  • Institutionalized
  • Spouse/homemaker
  • Tired of looking for a job, which might include e.g. a spouse (of employed person) who would like to find a job, a homeless person, a student, a middle age person living with his parents, etc..
How has unemployment changed through the years?: From the Bureau of Labor Statistics:

Wikipedia has a nice chart of US unemployment going back to 1890:

This show how high (20%) unemployment became in during the years of the Great Depression. The so-called Great Recession, caused by the financial crash in 2008, is much smaller in comparison, comparable to the unemployment rate of the early 1980s recession (10% unemployment rate).