# How to Calculate the Unemployment Rate: 10 Steps

It is very important that governments are able to determine what percentage of their population is unemployed, in order to determine measures to alleviate unemployment and help those who do not have a job. However, the unemployment rate for a population can be calculated in several ways. This calculation depends on how the terms "unemployed" and "employed" are defined and applied, as well as how the data is collected. There are a few other nuances to keep in mind when calculating the unemployment rate for a population.

## Steps

### Method 1 of 2: Calculate the Federal Unemployment Rate

#### Step 1. Calculate the number of unemployed people

The federal government defines "unemployed" people as those who are able to work and who have actively looked for work in the past four weeks.

• Actively seeking work is part of a broad category that includes contacting an employer directly with a resume or through an interview, going to a public or private employment agency, asking friends or family about job opportunities, go to a school employment center, post job postings, or fill out job applications.
• People who are unemployed but have stopped looking for a job, either because they do not believe they can find one in their line of work, because they could not find a job before, or because they feel they are too old or too inexperienced to work, are considered "linked marginally to the workforce "and are therefore not considered part of the workforce.
• The federal government estimates this number by surveying 60,000 American households each month.

#### Step 2. Calculate the number of people employed

The employed population of a nation is made up of people who have full-time jobs. They are also considered employed if they are self-employed, if they work part-time or if they work for a family business for more than 15 hours a week, even if the work is unpaid. People who are on maternity or paternity leave, on sabbatical or on vacation are also considered busy because they have a job to return to.

• Even if a person is employed part-time or works in a job below their pay scale, that person is still considered a busy person.
• The federal government also estimates this number by surveying 60,000 American households each month.

#### Step 3. Remove people who are not considered to be in the workforce

People who are not part of the workforce are those who are not actively looking for work or who are otherwise busy, whether they are students, housewives or people with disabilities. The group of people who are not part of the workforce includes those under the age of 16, people held in institutions such as prisons and nursing homes, those who serve in the armed forces, retirees, students and the disabled.

### It is important to know which people are not considered part of the workforce, so you should not mistakenly count them as part of the workforce or not and skew the equation

#### Step 4. Divide the number of unemployed persons by the total number of employed and unemployed persons

For example, if we have 4 million unemployed and 40 million employed, we can divide 4 by 44 and get 0.09.

• Keep in mind that when calculating actual unemployment, the figure will not be as nice and accurate.
• You might notice that the original figures were in the millions but you removed all the zeros, deciding to just divide the other digits. If you divide the number with all its millions digits, you will get the same decimal. Take the test, you'll see!

#### Step 5. Multiply the decimal number by 100 to get the percentage

This calculation is as easy as moving the decimal point two spaces to the left, for example, by converting 0.09 to 9%.

#### Step 6. Find the employment rate by subtracting this number from 100

If you want to go a step further and want to know what the employment rate is, then all you have to do is take the unemployment rate and subtract it from 100.

### Method 2 of 2: Calculate Alternative Unemployment Measures

#### Step 1. Calculate the number of employed and unemployed people using federal standards

You can use the figures from the Federal Bureau of Labor Statistics, which are calculated through a survey of 60,000 households each month.

### As indicated in the first method, the number of unemployed workers does not include all those who do not have a job, but instead only considers those who have looked for work "actively" in the last four weeks and the adjustment of other parameters. specified by the federal government

#### Step 2. Calculate the federal unemployment rate

To calculate this percentage, you will have to calculate the federal unemployment rate by dividing the number of people who are actively looking for work but cannot find it, by the total number of people who work and those who are looking for work. Follow the first method to complete this calculation.

#### Step 3. Calculate alternative unemployment percentages

The federal unemployment rate gives us a comprehensive picture of the true number of people who do not have a job. A person who has not actively looked for work in 4 weeks, even if they have thought about it or read job advertisements carefully, does not count as unemployed and is not considered part of the workforce. If you want to calculate a more accurate percentage of the people who are out of work, you will have to add some of the people who are not included in the federal calculation.

• To calculate the number of unemployed people who have not looked for work in the last four weeks, the percentage should include only those people who are willing and available for work, as opposed to those who are permanently unemployed, such as retirees.
• The Office of Labor Statistics makes this type of information available to you on its website, in addition to the most common data they use to calculate unemployment. You can access this information at:

#### Step 4. Add the alternative unemployment percentage to the federal unemployment rate

This number will give you a more complete picture of the percentage of people who are out of work.