High Employment Low Unemployment
Of all the macroeconomic indicators, employment and unemployment are most directly felt by individuals. People want to be able’ to get high-paying jobs without searching or waiting too long. and they wane to have job security and good benefits, In macroeconomic terms. these are the objectives of high which is the counterpart of low unemployment. Figure 20-3 on page 419 shows trends in ‘unemployment over the last six decades. The unemployment rate on the vertical axis is the percent.age of the labor force that is unemployed: The labor force includes all employed persons and those unemployed individuals who are seeking jobs. It excludes those without work who are not looking for jobs.
The unemployment rate tends to reflect the state of the business cycle: when output is falling. the demand for labor falls and the unemployment rate .rises. Unemployment epidemic proportions in the Great Depression of the 1930s,when as much as one-quarter ‘of the workforce was idled. Since World War II, unemployment in the United States has fluctuated but has avoided the high rates associated with depressions and the low levels that would trigger great inflation.
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