What Is Absolute Employment?

Malcolm Tatum

Absolute employment is a means of calculating the total amount of the population in a defined geographical location. Unlike other methods, this approach calls for identifying an exact number of individuals who are actually employed, rather than developing the results into a percentage. The goal of identifying absolute employment is often to get a better understanding of the current relationship between the number of people who are actually working and the total number of people who actually reside in the area under consideration.

Businessman giving a thumbs-up
Businessman giving a thumbs-up

As part of the calculation of absolute employment, every human being residing in the defined geographical area is accounted for. Some are automatically ranked among the unemployed, including children who are too young to be considered part of the work force, those with disabilities that would preclude employment, and even retirees who are no longer active in the work force. Once every citizen has either been identified as holding a job that meets the criteria of the evaluation or being classed as unemployed, it is possible to determine just how many people constitute the current level of absolute employment.

The value of determining absolute employment can be significant to a region or even a whole nation. Since the figure easily identifies how many of the total populace are working, this can make it easier for governments to project what they can reasonably expect to collect in the way of income taxes. To a lesser degree, this figure can also be helpful in projecting how much revenue can be anticipated from local and state sales taxes. Municipalities can also use this figure for urban development and planning, based on what is happening in terms of the expansion of the number of citizens employed to the overall total population. Depending on the results, this can provide data to support projects such as the expansion of a school, developing additional road systems in certain parts of the area, or even rezoning some sections of a city for multiple rather than singular uses.

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It is not unusual for government agencies and municipalities to assess absolute employment on a regular basis. Comparing the current data collected with the information from past periods can be very helpful in spotting trends in population shifts, the impact of the shutting down of some industries on the area, and even the benefits derived from the establishment of new employers in the area. An annual assessment of absolute employment is common in many areas, and can be conducted more frequently if desired.

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