Okun’s Law is the basis for the Okun Gap: the difference between real GDP and potential GDP.
Economist Arthur Melvin Okun saw the unemployment rate as a waste, a misuse of potential. All of those people looking for jobs...who would love one...could be contributing to GDP, but aren’t, because they’re still on the hunt.
Okun crunched some numbers and found an empirical relationship between quarterly changes in unemployment and economic output losses. The more unemployment grew, the more economic value was lost...the value that coulda-shoulda-woulda been a part of the nation’s GDP.
See: Okun Gap.