Question

Learning Objective 11.1 Understand what unemployment is and how it's measured. 1. Sarah, Alicia, and Philip all lost their jobs when the technology start-up they worked for was acquired by another company. After a few weeks of searching for another full-time job, Sarah decided to go back to school to get an LPN certification. In order to finish as fast as possible, Sarah chose not to work while finishing the certification. Alicia took a part-time job in retail shortly after losing her job, but she continues to search diligently for full-time work. Philip searched for a job for the first five weeks after being laid off, but as "bills began piling up, he found himself moving into his parents' basement. He recently gave up looking for work because he figures that there just aren't jobs available right now so there is no point looking. Are Sarah, Alicia, and Philip unemployed, employed, or not in the labor force? Would any of the three be considered a discouraged worker? How would each contribute to the unemployment rate?

Answer 1

Sarah is not in the labor force as she is not working or seeking employment due to schooling. Alicia is employed but may be underemployed. Philip is a discouraged worker and not in the labor force. Only Alicia would affect the unemployment rate by being part of the labor force.

Step-by-step explanation:

Employment Status of Sarah, Alicia, and Philip

Understanding how employment status is defined is crucial when considering the state of unemployment for individuals like Sarah, Alicia, and Philip, who have recently lost their jobs. According to the guidelines used by the U.S. Bureau of the Census to calculate the unemployment rate, a person is classified as:

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• Employed if they are currently working for pay.
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• Unemployed if they are out of work and actively looking for a job.
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• Not in the labor force if they are out of paid work and not actively looking for a job.

Sarah, who decided to go back to school for an LPN certification and is not working or looking for work, would be considered not in the labor force. Alicia, who is working part-time and continues to look for full-time employment, would be considered employed, but part of the underemployed population if the work done does not match her qualifications or desired hours. Philip, who has stopped looking for work out of discouragement, falls into the category of a discouraged worker and would be classified as not in the labor force.

Only Alicia would be contributing to the labor force and thus affecting the unemployment rate, as she is the only one both working and actively seeking full-time employment.

Answer 2

Sarah is not unemployed, Alicia is employed, and Philip is unemployed, discouraged worker. Each person would contribute differently to the unemployment rate.

Step-by-step explanation:

Sarah is not considered unemployed because she chose not to work while finishing her certification. She is not actively looking for work and is therefore not in the labor force. Alicia is considered employed because she has a part-time job and is actively looking for full-time work. Philip would be considered unemployed and a discouraged worker because he stopped looking for work and believes there are no available jobs. Each individual would contribute differently to the unemployment rate: Sarah would not contribute, Alicia would contribute to the employed category, and Philip would contribute to the unemployed category.