The U.S. Department of Labor (DOL) measures unemployment by the number of capable workers who are not employed, but are currently seeking a new job. This means that individuals with disabilities, retirees and workers who are not actively looking for employment are not considered when measuring the workforce. For example, full-time students who are not looking for a job or individuals staying home to care for a child would not be considered a part of the workforce.
The unemployment rate in the United States is calculated monthly by the DOL Bureau of Labor Statistics when they conduct surveys on a sample of households, businesses and government agencies. To calculate the unemployment rate, the Bureau of Labor will divide the number of unemployed workers with the total amount of participants in the labor force in a specific area.
In order to support unemployed workers in the United States, federal and state governments offer unemployment insurance benefits. These benefits are distributed under the federal Unemployment Insurance (UI) program.
What is unemployment?
There are several concepts that the U.S. Department of Labor uses to help define unemployment. Workers who are able-bodied and are working jobs are considered employed. On the other hand, individuals who are capable of working and have been actively looking for employment in the last month are considered unemployed. However, individuals who fall into either of these categories are considered a part of the U.S. labor force. Everyone else in the population will be excluded from the labor force and won’t be counted when measuring unemployment rates. Other members of society, such incarcerated prisoners, residents in medical institutions and military service members are also excluded from unemployment calculations.
There are three forms of unemployment that are recognized by the U.S. Department of Labor:
- Frictional Unemployment – This form of unemployment accounts for the period of time when a worker is transitioning between occupations.
- Cyclical Unemployment – Unemployment that occurs when there are not enough jobs on the market to employ all job seekers.
- Structural Unemployment – When there is a disparity between the skills of unemployed workers and the skills required on the job market, structural unemployment occurs.
The United States’ Unemployment Insurance Program
In an effort to address the nation’s unemployment issue, the federal government launched the Unemployment Insurance benefits program. In addition to the monthly paychecks payed out to former workers, this program offers a variety of resources for job seekers. Some of these additional benefits include job education for various positions and other training opportunities. Beneficiaries also receive access to self-employment assistance if they are interested in following that career path.
The United States Unemployment Insurance program first began after the Federal Unemployment Tax Act (FUTA) was passed. The Federal Unemployment Tax Act authorized the Internal Revenue Service (IRS) to collect taxes from employers to fund the program. Using these funds, federal and state governments operate the UI program. Former workers are also compensated using these funds. Typically, unemployment insurance provides workers with 40 to 50 percent of their wages from previous months.
General guidelines for the unemployment insurance programs are set by the U.S. Department of Labor. However, individual states operate their own programs which allows them to establish specific guidelines for the program. Some things that states can change include the requirements to participate in the program and the amount of benefits participants can receive.
How to Submit Unemployment Claims
Before you apply for unemployment insurance, you should ensure that you meet the eligibility requirements. To verify, you can visit an unemployment insurance agency in the state where you were employed. In general, applicants must meet the following eligibility guidelines to receive benefits:
- You must have lost your job through no fault of your own. Some valid reasons include:
- Lack of available work.
- Company layoffs.
- You must meet the state minimum for amount of time worked and number of paychecks collected.
- You must meet any state-specific requirements for unemployment insurance benefits.
Since each state establishes their own UI program, their requirements may vary. For the most accurate information for your area, visit your local unemployment insurance office or contacts them via phone or internet.