It used to be based on three simple common sense points: You have no job now; you are available for work now; and you have actively looked for work in the past four weeks.
The method for calculating unemployment has changed in several ways. Simply losing your job doesn't mean you're unemployed today, although it sure as H*** feels like it when you don't have a paycheck coming in so you can pay your bills. However, if you stop actively looking for work, you are longer considered unemployed. I don't know what those discouraged people are called today, but they don't have a job, so they are unemployed by most people's definition.
On the other hand, if you are working part-time at a low-paying job because that's all that is available, you are considered employed. You could have been an engineer but now you are working at WalMart sweeping floors, but that's how it's calculated, and it is an unfair double standard!
Then you have what is called the "labor participation rate," which measures the total labor force available versus those actually working doing some kind of job, no matter how menial or part time. So if you have 10 unemployed, but five have just stopped looking for work because there are no jobs available, the unemployment rate will drop because those five are no longer considered unemployed. : It doesn't change the fact that they still don't have a job, but it makes the unemployment rate look better.
That's the problem with the way it's currently calculated. If the unemployment rate falls due to people giving up looking, rather than job creation, it shows that the labor market is not expanding, but either shrinking or not expanding enough to accommodate new workers joining the labor force.
Obama told us for years that he was focusing on job creation "like a laser," but so far only part time or low-paying jobs are available for the most part, and our standard of living is dropping for an awful lot of people. Companies need to make a profit or they either close or move to more business-friendly countries. When companies like GM build a new plant in Mexico instead of here, that pits Wall Street and the need to satisfy shareholders against the workers on Main Street USA who used to do those jobs- the workers lose every time! I have repeatedly suggested that thousands of new jobs could be created if we just upgraded our grid which is badly needed, as an example, and that would be a double good...people go back to work and we bring our grid into the 21st century where we all live now. Just my opinion.....
Excellent work, Pol ... but you know it won't bring an end to this, don't you?