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Western University
Management and Organizational Studies
Management and Organizational Studies 2275A/B
Henry Meredith

Chapter 21 Monitoring Jobs and Inflation Employment and Unemployment • Every month, Statistics Canada surveys 54,000 households to track the state of the nation’s labour market. • This survey is called the Labour Force Survey. • The working-age population is the total number of people aged 15 years and over. • The working-age population divides into two groups: those in the labour force and those not in the labour force. • The labour force divides into two groups: the employed and the unemployed. • A person is employed if they have either a full-time job or a part-time job. • A person is unemployed if they are in one of the following categories: o Without work but has made specific efforts to find a job within the previous four weeks o Waiting to be called back to a job from which he or she has been laid off o Waiting to start a new job within four weeks • Statistics Canada calculates four labour market indicators: o The unemployment rate o The involuntary part-time rate o The labour force participation rate o The employment-to-population ratio • The unemployment rate is the percentage of the people in the labour force who are unemployed. • Unemployment rate = (Number of people unemployed ÷ Labour force) × 100. • The involuntary part-time rate is the percentage of people in the labour force who have part-time jobs and want full-time jobs. • Involuntary part-time rate = (Number of involuntary part-time workers ÷ Labour force) X 100. • The labour force participation rate is the percentage of the working-age population who are members of the labour force. • Labour force participation rate = (Labour force ÷ Working-age population) × 100. • The employment-to-population ratio is the percentage people of working age who have jobs. • Employment-to-population ratio = (Number of people employed ÷ Working-age population) × 100. • The labour force participation rate and the employment-to-population ratio show upward trends. • The unemployment rate increases in recessions and decreases in expansions. • The upward trends in the labour force participation rate and the employment-to-population ratio are accounted for mainly by the increasing participation of women in the labour market. Unemployment and Full Employment • Two types of labour are excluded from the official unemployment measure: o Marginally attached workers o Part-time workers who want full-time jobs • A marginally attached worker is a person who currently is neither working nor looking for work but has indicated that he or she wants and is available for a job and has looked for work sometime in the recent past. • A discouraged worker is a marginally attached worker who has stopped looking for a job because of repeated failure to find one. • People become unemployed if they: o Lose their jobs and search for another job o Leave their jobs and search for another job o Enter or re-enter the labour force to search for a job • People end a spell of unemployment if they: o Are hired or recalled o Withdraw from the labour force • The figure below shows the labour market flows that create and end unemployment. • People who are laid off from their jobs, either permanently or temporarily, are called job losers. • People who voluntarily quit their jobs are calledob leavers. • People who enter or re-enter the labour force are called entrants and re-entrants. • Most unemployment results from job loss.
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