Economics Questions

(Objective#2)-To explain the Significance or Importance of the Labor Force or LF in a country’s economy:

What is the Significance or Importance of the LF in any country’s economy?

There are several reasons for the importance of the LF in a country’s economy:

· The ratio of the # employed labor the # of unemployed labor tells us something about the health of the economy whether it’s performing well or poorly i.e. is the economy growing or stagnating?

· If significant #s of people are unemployed and underemployed and are willing and able to work though unable to find jobs, it tells us that the economy is operating sub-optimally and therefore below its PPC. On the contrary, if all those who want to work can find work, it tells us that the economy may be operating at full employment i.e. on the economy’s PPC

· The labor force particularly those with jobs are the creators of a country’s wealth and therefore the more people who have jobs, generally speaking whether full time jobs, part time jobs or self-employed, the more wealth created in a society and vice versa,

· The greater the # of discouraged or marginalized workers i.e. those left out of the LF by the BLS each month/year, the more dismal the performance of the economy because it tells us that those without jobs have postponed their job search because of the difficulty to find jobs etc.

· Likewise the # personas who are unemployed, underemployed and those who are considered by the BLS to be discouraged or marginalized workers help to clarify for us the levels of economic and social challenges (sufferings) of these groups at the macroeconomic level

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