keannu
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- Dec 27, 2010
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Source : EBS Reading Practice, 2023, 5-5, 58p
One of the unhelpful consequences of the term “technological unemployment” is that it encourages us to think that the only (or at least the main) way that new technologies will affect the world of work is by changing the unemployment rate — the percentage of workers in the labor market who are looking for a job and cannot find one. That figure alone, though, does not capture the full picture. To begin with, some people, facing the mismatches of skills, identity, and place, might simply give up on the job hunt and drop out of the labor market altogether. If that were to happen, the official unemployment rate would actually fall : since those people were no longer searching for work, they would not count as being unemployed for the purposes of that Statistic.
It is important, then, to also pay attention to what is known as the “participation rate”: the percentage of people in the entire working-age population (not just those active in the labor market) who are employed. In the United States today, for instance, the unemployment rate is an impressively low 3.7 percent. At the same time, however, the participation rate has collapsed, falling to its lowest level since 1977. More and more working-age Americans, it appears, are abandoning the world of work altogether — and that should be a cause for alarm. Similarly, in the future, we should be cautious about focusing exclusively on the unemployment rate, and keep an eye on the participation rate as well.
1. In the 1st thick line, the definition of "participation rate" seems to be wrong. Doesn't it have to exclude "who are employed" at the last part if it means "the employed+job seekers"?
2. In the 2nd thick line, participation rate seems to mean "the employed+job seekers", so if the number of the unemployed dropped, wouldn't the number of participation increase? But it says to the contrary.
One of the unhelpful consequences of the term “technological unemployment” is that it encourages us to think that the only (or at least the main) way that new technologies will affect the world of work is by changing the unemployment rate — the percentage of workers in the labor market who are looking for a job and cannot find one. That figure alone, though, does not capture the full picture. To begin with, some people, facing the mismatches of skills, identity, and place, might simply give up on the job hunt and drop out of the labor market altogether. If that were to happen, the official unemployment rate would actually fall : since those people were no longer searching for work, they would not count as being unemployed for the purposes of that Statistic.
It is important, then, to also pay attention to what is known as the “participation rate”: the percentage of people in the entire working-age population (not just those active in the labor market) who are employed. In the United States today, for instance, the unemployment rate is an impressively low 3.7 percent. At the same time, however, the participation rate has collapsed, falling to its lowest level since 1977. More and more working-age Americans, it appears, are abandoning the world of work altogether — and that should be a cause for alarm. Similarly, in the future, we should be cautious about focusing exclusively on the unemployment rate, and keep an eye on the participation rate as well.
1. In the 1st thick line, the definition of "participation rate" seems to be wrong. Doesn't it have to exclude "who are employed" at the last part if it means "the employed+job seekers"?
2. In the 2nd thick line, participation rate seems to mean "the employed+job seekers", so if the number of the unemployed dropped, wouldn't the number of participation increase? But it says to the contrary.
