In a recent episode of our weekly podcast, I had touched on a minor economic metric and I figured that now, after a number of years, I should probably put my economics degree to use to educate people about the endless amount of meme’ing within economics…
We are going to cover the basics unemployment ratio. Economists exist on a similar plain as lawyers, meaning that they will just make up random words to make their explanations sound more sophisticated than necessary.
You might be thinking that the unemployment ratio is just as it sounds, people that are unemployed in the U.S., but you would be sorely mistaken because you are not using your meme mind properly. To use your meme mind you must ask yourself, “what can I do to make this number be lower?”
- Well some people just aren’t looking (get em outta here they don’t count)
- Some people are underemployed (keep them in)
- Part time employed? (yup let’s throw that in there as employed)
- Meme makers online? (well we might as well count them as employed)
You have just calculated the ratio (U-3) and that is the ratio Megamind Yellen uses in all of here press conferences to tell you that you need to spend more money.
There are 5 other ways that we can look at this same ratio because… why not?
- U-1: Persons unemployed 15 weeks or longer (1.6%, July)
- U-2: People their lost their jobs (2.2%, July)
- U-3: Unemployed as % of labor force (4.6%, July) **This is the number that everyone looks at.**
- U-4: Unemployed plus discouraged workers (4.9%, July)
- U-5: Unemployed plus discouraged plus looking for a job (5.5%, July)
- U-6: Unemployed plus looking for a job, plus discouraged workers, plus part time to eat (8.9%, July)
One last metric that should be known is the labor participation rate, which is actually what is sounds like; how many people are working as a percentage of the population. This ratio will tell you more than the unemployment number (in regards to the direction of the economy) because if more people work, they can buy an Oculus Rift with the portable animatronic silicon doll attachment to further separate themselves from society, which is usually viewed as a positive.
The above has just opened up your meme mind to explain how unemployment rates are calculated, and I am sure that this has not been helpful at all.