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Unemployment: Macroeconomics and Influenza and ILI Activity: Microeconomics

Updated on June 8, 2014

Unemployment: Macroeconomics

Unemployment is one of two “key concepts that are at the heart of macroeconomics and economic policy” (Sexton, 2012), the other is inflation. Macroeconomics is the study of the whole economy. (Sexton, 2012) The unemployment rate takes into account the total labor force and the total number of individuals who are unemployed in that labor force. The labor force consists of the quantity of people at 16 years of age and older who are able and willing to be employed. Therefore, the unemployment rate is formulated as the number of unemployed divided by the total civilian workforce and multiplied by 100.

The Bureau of Labor Statistics states that the number of unemployed persons for the month of January 2013 is at 12.3 million[1] which leads to a 7.9%[2] unemployment rate. Of the 12.3 million individuals who have been unemployed, there are 4.7 million[3] that have constituted long-term unemployment. I think it may be worth noting that there were only 3.6 million[4] job openings in December 2012. That leaves a difference of 8.7 million.

There are several reasons that constitute unemployment. First is supply and demand. The quantity of labor supplied is greater than the quantity of labor demanded, resulting in an excess of quantity of supplied labor—unemployment. (Sexton, 2012) Within the supply and demand are several more reasons, minimum wages, unions, and an efficiency wage theory. The minimum wages are more than applicable to workers under age 25 and do not constitute a large portion of the workforce therefore, this has a small impact on unemployment. Through some collective bargaining in the union sector that implys increased wages, the amount of labor demanded decreases and the amount supplied increases. Lastly, the efficiency wage theory suggests that increases in wages will increase the efficiency of the workers output, a showdown of incentive. This efficiency wage may increase higher labor costs, but may be offset by “lower turnover, less absenteeism, better hires, and less shirking—in short, greater work productivity.” (Sexton, 2012)

There are several more reasons as to why there are unemployed individuals and these individuals seemingly fall into categories. First, discouraged workers, people who havn’t actively sought employment for four weeks, actually fall out of the labor force. Currently, there are 804,000[5] discouraged workers. Secondly, age, sex, and race constitute another segment of the unemployed, where “unemployment trends tend to be higher among the very young, among blacks and other minorities, and among workers with few skills.” (Sexton, 2012) Thirdly, there are four categories in which unemployed persons fall into and these consist of job leavers, job losers, reentrants and new entrants. Job losers are laid off temporarily or fired, job leavers quit their jobs, reentrants are persons who have worked before and are reentering the workforce and new entrants consist of individuals who are employed for the first time. Also, there are several types of unemployment.

Underemployment can exist when a worker’s level of skill is higher than necessary for a job and leads to inefficiency. In structural unemployment, the worker’s skill level is lower than necessary and they do not have “marketable skills” therefore, this leads to long-term unemployment. Seasonal unemployment exists for specific careers, summer positions, or temporary employment. Unemployed persons who are actively seeking the “best” employment position, the downtime between jobs falls into the frictional unemployement category. As for right now, I could conclude that the current unemployment rate is greater than average (an average rate of 5%, a current rate at 7.9%), and has remained above average for several months now. And this also concludes that the recession, signified by cyclical fluctuations in the economy, have led to cyclical unemployment for a duration of some time.

According to the National Bureau of Economic Research (NBER), the recession, characterized by a “period of significant decline in output and employment”[6] had peaked in December 2007 and troughed in June 2009[7]. The length of the recession had lasted for 18 months. The peak signifies that the expansion has reached its end, and output is at the highest level. The trough on the other hand signifies the lowest point of a business cycle and this is the point where declining output ends. I suppose this may mean that the economy is reverting back into an expansion, a recovery and coming out of the contraction, the recession. Then 2013 would mark the 4th year of the recovery phase, because I don’t suppose that the high unemployment rate would suggest any different.

[1] (Economic News Release - Employment Situation Summary, 2013)

[2] (Economic News Release - Employment Situation Summary, 2013)

[3] (Economic News Release - Employment Situation Summary, 2013)

[4] (Economic News Release - Job Openings and Labor Turnover Summary, 2013)

[5] (Economic News Release - Employment Situation Summary, 2013)

[6] (Sexton, 2012)

[7] (U.S. Business Cycles Expansions and Contractions, 2013)

Influenza and ILI Activity: Microeconomic

[January 2013] Thousands of people have contracted several viruses since October. In this video clip, the reporter states that more than 11,000 confirmed cases (Health-Doctor: Flu shots not perfect but helpful) were reported in Boston and 41 states reported widespread flu cases (Health-Doctor: Flu shots not perfect but helpful). Actually, it has increased. Widespread geographic influenza activity (Situation Update: Summary of Weekly FluView, 2013) has now reached 48 states according to the CDC.

[January 2013] During Jan. 6 - 12, ILI (influenza-like-illness) reached thirty states and New York City. The previous week was 24 states. The CDC also states that an additional 10 states have reported moderate ILI activity. The CDC also states that people seeing their healthcare provider still remains above the national baseline for the sixth consecutive week. (Situation Update: Summary of Weekly FluView, 2013)

[February 2013] Since January, the CDC states that for three weeks, there has been a downward trend of people who have been seeing their healthcare professional from Feb 3 – 9. And “most regions are showing stable or declining levels of ILI activity again this week.” From January, 11 states and New York City have reported high ILI activity and 31 states reported widespread geographic influenza activity. Almost 9,000 hospitalizations since October have been reported. This data only constitutes 15 states[1] or roughly 9%[2] of the population. The data that represents pedriatric deaths from pneumonia and influeza, is currently at 64[3] for the 2012-2013 season. The highest in the past years of pediatric deaths though was 2009-10, at 282![4] The death rate associated with pneumonia and influenza is still above the “epidemic threshold” at 9.1%[5].

[March 2013] For the week of Feb 17-23, “no states reported high ILI activity but 12 states and New York City continue to report moderate ILI activity.”[6] There are now 12 states that have reported widespread geographic activity, and 28 states that have reported “regional influenza activity.” The CDC states that there have been 10,227 “influenza-associated hospitalizations” since October 2012, but once again, this data only represents 15 states. Pediatric deaths have also increased from 64 to 81.[7] The common names or types of viruses that have been contracted include Influenza A – H1N1, Influenza A – H3N2, and Influenza B.

As we can see here, the demand for healthcare was met equally with the supply of healthcare, for those who sought it. Costs of contracting one of the four influenza viruses along with pnemonia, could result in death, and it fractures the body’s immune system for several days, weeks, or months, while trying to regenerate. Possible solutions would be for both firms and households to implement a greater degree of prevention. Hand santitizers have become a big thing in the past few years, they are inexpensive, and should be supplied nearly everywhere. Firms should implement ways of sanitation to further the well being and increase our standards of living.

[1] (Situation Update: Summary of Weekly FluView, 2013)

[2] (Situation Update: Summary of Weekly FluView, 2013)

[3] (2012-2013 Influenza Season Week 6 ending February 9, 2013, 2013)

[4] (2012-2013 Influenza Season Week 6 ending February 9, 2013, 2013)

[5] (2012-2013 Influenza Season Week 6 ending February 9, 2013, 2013)

[6] (Situation Update: Summary of Weekly FluView, 2013)

[7] (Situation Update: Summary of Weekly FluView, 2013)


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      Howard Schneider 3 years ago from Parsippany, New Jersey

      Very interesting, complex, and informative Hub, Goldie5.