Unemployment Rate and Labor Force Calculation
What is the labor force if the unemployment rate is 6 percent and the number of employed is 188 million?
a. 11.28
b. 176.72
c. 188
d. 200
Answer:
If the unemployment rate is 6 percent and the number of employed is 188 million, then the labor force equals 200 million in millions. The correct option is d.
The labor force includes both employed and unemployed individuals who are capable of working within a specific region or country. It is the sum of the number of people who are employed and the number of people who are unemployed.
Labor force = Number of employed + Number of unemployed
If the unemployment rate is 6 percent, then the employment rate is 94 percent. The number of unemployed can be calculated by multiplying the total labor force by the unemployment rate. Therefore:
Number of unemployed = Unemployment rate × Labor force
Putting the values: Number of employed = 188 million, Unemployment rate = 6%
Number of unemployed = 0.06 × Labor force
Total labor force = Number of employed + Number of unemployed = 188 million + 0.06 × Labor force
Since the employment rate is 94 percent, the number of unemployed is 6 percent of the total labor force. 0.06 × Labor force = 0.06 × Total labor force
Therefore,
Total labor force = Number of employed + Number of unemployed = 188 million + 0.06 × Labor force = 188 million + 0.06 × Total labor force = (1 + 0.06) × Total labor force = 1.06 × Total labor force
If the number of employed is 188 million, then the total labor force is:
Total labor force = Number of employed ÷ Employment rate
Total labor force = 188 ÷ 0.94
Total labor force = 200 million
Therefore, the labor force equals 200 million in millions.
Option (d) is correct.