In a given community, the unemployment rate is 3.1% and their working-age population is 1.2 Million. Labor force participation was 92% in this community in December of 2009. In January 2010, this community takes in 80,000 refugees, 65,000 of which are working-age adults. All working-age refugees will be looking for a job in January and if they cannot find one will continue to look until they do. If 70% of the refugees start a new job in January, what will be the Unemployment rate in this community on February 1st?

Question

In a given community, the unemployment rate is 3.1% and their working-age population is 1.2 Million. Labor force participation was 92% in this community in December of 2009. In January 2010, this community takes in 80,000 refugees, 65,000 of which are working-age adults. All working-age refugees will be looking for a job in January and if they cannot find one will continue to look until they do. If 70% of the refugees start a new job in January, what will be the Unemployment rate in this community on February 1st?

Answer 1

To calculate the unemployment rate on February 1st, we need to calculate the number of unemployed individuals and the labor force size.

First, let's start by determining the labor force size in December 2009:

Labor force participation rate = (Labor force size / Working-age population) * 100
92% = (Labor force size / 1,200,000) * 100

Rearranging the equation, we can determine the labor force size:
Labor force size = (92% * 1,200,000) / 100
Labor force size = 1,104,000

Now, let's calculate the number of refugees who are working-age adults and will be looking for a job in January:

Number of working-age refugees = 65,000

Assuming 70% of the refugees find a job in January, we can calculate the number of newly employed individuals:

Number of newly employed refugees = 70% * 65,000
Number of newly employed refugees = 45,500

To calculate the number of unemployed individuals on February 1st, we subtract the number of newly employed refugees from the total labor force size:

Number of unemployed individuals on February 1st = Labor force size - Number of newly employed refugees
Number of unemployed individuals on February 1st = 1,104,000 - 45,500
Number of unemployed individuals on February 1st = 1,058,500

Finally, we calculate the unemployment rate on February 1st:

Unemployment rate = (Number of unemployed individuals on February 1st / Labor force size) * 100
Unemployment rate = (1,058,500 / 1,104,000) * 100
Unemployment rate ≈ 95.86%

Therefore, the unemployment rate in this community on February 1st will be approximately 95.86%.