📊 Think of the labour market like a big pizza party.
The labour force is all the people who are ready to work (the guests).
The unemployed are the guests who show up but don’t have a seat yet (empty chairs).
The unemployment rate tells us what fraction of the guests are still waiting for a seat.
The formula is simple:
\$U = \frac{U_n}{L} \times 100\%\$
| Term | Definition |
|---|---|
| Labour Force | All people aged 15+ who are either employed or actively looking for work. |
| Unemployed | People who are not working but are available for work and have actively searched for a job in the last four weeks. |
| Unemployment Rate | Percentage of the labour force that is unemployed. |
Exam Tip:
• Always remember the formula: Unemployment Rate = (Unemployed ÷ Labour Force) × 100%.
• Check the question for the exact numbers and plug them into the formula.
• If the question asks for labour force participation rate, remember it’s a different formula: Labour Force ÷ Working Age Population × 100%.
• Use the emoji 🚀 to remind yourself that a higher unemployment rate means fewer people are “on the launchpad” for the economy.
• Practice with past paper questions to get comfortable with the numbers.