The U.S. Bureau of Labor Statistics (BLS) released its unemployment rates for April 2016. The U-3 unemployment rate is 5%, but the U-6 rate is 9.7%! The BLS calculates six unemployment rates, labelled U-1 through U-6. The unemployment designation “U-3”, is the unemployment rate published in the media and government communications, measures the number of individuals unemployed as a percentage of the civilian labor force. However, it is not the “true” unemployment rate, referred to as the U-6 rate. The U-3 rate does not includes millions of individuals who are willing to work, but don’t fit into the BLS’s narrow definition of unemployed.
The U-6 rate shows the total under utilization of labor in the U.S. The rate includes the U-3 unemployed and:
Federal Reserve Chair Janet Yellen and some politicians have commented in the past that the U-6 rate is more representative of unemployment since it takes into account the “discouraged workers” class as well as people working part-time instead of full-time due to economic conditions.
Mainstream media and the government do not discuss the “true” unemployment rates. The U-6 rate appears as the last line of their reports. The “true” unemployment rate should be highlighted to keep us better informed.
Here’s another statistic that is never discussed: the participation rate, which is the percent of the civilian population who participated in the labor force by either having a job or actively seeking employment.
This would be a great debate question.