Chart of the Week: Estimated Labor Slack vs Nominal Unemployment Rate
How much better things would have to be to get everyone back into the labor pool? The shape of the “demand curve” for labor tells us that, based on the potential incentives to work. In effect, this number measures how much labor demand is below its potential.
Estimated Labor Slack vs Nominal Unemployment Rate
click for larger chart
Source: BOP
The difference between the Nominal Unemployment Rate and the
Labor Slack Rate can be called "asymetrical unemployment". That is,
the downward pressure on wages created by former or potential workers who have
not entered the labor pool.
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Tuesday, March 08, 2005 | 03:40 PM | Permalink
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