Ivan Kitov

Unemployment: Historical Chart Sends Scary Message

Unemployment rate is defined as a share of some changing portion of total working population. People in this portion are called labor force and the portion itself is referred in economics as to labor force participation rate. Unemployed are those people who are currently ready (for example, students are not ready during scholar terms) to occupy any job position but have no opportinity to do that because of the absence of vacancies.
This tricky definition of unemployment confuse many researchers and broader audience. For example, labor force participation rate in developed countries varies in a wide range and thus the same portion of the total working age population announcing itself as " unemployed" may define quite different "unemployment rates" .

When applied to one country, the definition misses actual long-term variations in labor force participation rate. However, variation in participation rate are tramendous. As it has been actually observed in the USA since the 1960s. In 1963, the participation rate was below 58.7% , and between 1997 and 2000 it was 67.1%. the latter was the peak and since then the rate has been falling. As a result, people are likely to move first into unemployment and then out of the labor force at all. This is a long-term process with some fluctuations.
Again, this is an observed (actual) process with some fundamental economic, social, demographic, and etc. forces behind it. In 2006, the rate was 66.2%, i.e. 1 percenatge point less than in 2000. 1% of the participation rate or 1% of the working population is ~2,300,000 people leaving labor force through unemployment.
As one can see, this effect can not be neglected:
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