Which Measurement of Unemployment is the Most Accurate?

In the United States, the Bureau of Labor is responsible for tracking the percentage of people who are unemployed, seeking employment, and/or receiving unemployment benefits. However, a specific definition is used to determine whether an individual is "officially" unemployed in the U.S. According to the U-3 definition, you are considered unemployed by the Bureau of Labor if you are seeking employment and have searched for a job within the last four weeks.

What is Missing From This Measurement?

The U-3 definition is the most commonly used form of measurement when tracking individuals who are actively seeking employment. However, economists believe that this definition may actually be missing three of the following major factors:

  • Individuals who are unemployed may be discouraged from long-term unemployment. As a result, these unemployed individuals have stopped looking for work because they believe they do not have a chance to find a job. In most cases, these individuals would work if they had the chance to obtain employment.
  • Individuals who are working on a part-time basis are not considered unemployed under the U-3 definition. For these individuals, they would rather be working on a full-time basis, but they have not been able to find full-time work.
  • Individuals who are underemployed are not considered "officially" unemployed in the United States. This problem is seriously affecting qualified and educated youth who are graduating college or university and finding that they cannot find jobs in their specific fields of expertise. For instance, an individual with an engineering degree is working at a McDonald's because this is the only job that was available at the time of the job search.

What is Being Done to Address This Issue?

The Bureau of Labor Statistics (BLS) has attempted to address this problem by developing a second definition of what it means to be unemployed in the U.S. Using the U-6 definition, two of the previously mentioned factors are addressed. According to BLS, the U-6 definition includes all individuals who are "marginally attached to the labor force." In addition, the U-6 definition also applies to individuals who are employed on a part-time basis due to job availability and the state of the economy at the time of the job search. In specific, individuals who are marginally attached to the U.S. labor force are unemployed, but they are also not seeking work. However, these individuals are prepared to take on a new job if one was to become available. Therefore, these individuals have a job-market related reason for being unemployed. Furthermore, the following definitions are six forms of measuring unemployment according to the BLS:

  • U-1 definition: Individuals who have been unemployed for 15 weeks or longer.
  • U-2 definition: Individuals who have lost their jobs or completed temporary/contract jobs.
  • U-3 definition: Individuals who are completely unemployed.
  • U-4 definition: Individuals who are unemployed and discouraged to seek out work.
  • U-5 definition: Individuals who are unemployed, discouraged to find work, and marginally attached to the labor force.
  • U-6 definition: Individuals who are unemployed and marginally attached to the labor force through part-time employment due to economic and job-market related reasons.

However, the U-3 definition and U-6 definition are the two forms of measurements that are considered the most accurate and the most useful according to the U.S. Bureau of Labor Statistics.

Comments

Chandani
# Chandani
Tuesday, March 17, 2015 5:33 PM
As a lifelong DC metro area resedint, I can tell you that the Federal government workers there, on average, are very very spoiled and do. nothing. for society.Nationwide, Fed workers average salaries are $70k/year (more than $100k/year if you include benefits -and my oh my, they have the best there too). Average non-Federal worker salary? About $35k/year.They are greedy at the Federal trough for sure but it's the system that is broken and well beyond repair. The irony is that they are mostly a bunch of one-world-government, globalist types, who are killing themselves through their agenda to incorporate the planet.The only jobs (in bulk) being opened today are for the military and for any agency which can be used to control the populace (DHS, FBI, FEMA, etc.).They know what's coming . official (deceptive) unemployment is 10.2%. That's what's know as the U-3. Useful only for comparison purposes to other U-3 numbers. The REAL unemployment rate is the U-6, currently the gov't (are we getting it? not your friends!) has the U-6 at 17-18%, BUT, even this they fudge. They use an unrealistic component to it (death rate I believe) to make it softer than it really is.Bob Chapman of TheInternationalForecaster.com has current U-6 as of this past Friday (11/06/09) as 22.4%.Folks, that's a GREATEST depression number.This all by design by the globalists and their international banksters. Watch for pandemics of the strange kind (look at Ukraine now something bad happening there, and it ain't the flu.)Pandemics, martial law, it's all coming BY DESIGN. Have you read Atlas Shrugged? That novel is the globalist's esoteric message (meaning a message for them, the elected NOT for you and me) to their fellow travelers as to HOW America will be destroyed. All by design. All on purpose.If it feels depressing and overwhelming, that's because it is without the armor of Lord God in Heaven. The globalists have their god lucifer that's why they they are winning the battle so far.We are not fighting flesh and blood .we need to put on the armor of God to be saved from the evil coming, the evil that is HERE .Please don't dismiss this warning .your eternal soul is at stake.
Sridhar
# Sridhar
Friday, March 20, 2015 4:06 AM
Showing a slow moving stiatstic over such a short time is misleading, why did you choose to only go back to 2004, 6 years of data is an odd number? Could it be that you didn't want to include the data from the early Bush years that showed the rapid increase in unemployment started in 2000 (around the time the housing bubble burst), which then slowed by around 2004 and then accelerated again around 2008 (when the banking system imploded with fraud)? Cherry picking an oddball number of years is a sign that your twisting the data to make a point and based on a lot of the comments I'd say you're playing to the right. What would we see if you took it back 9 years or better yet 50 years? Having spent a large part of my professional life as a Geographic Information Systems (GIS, Mapping software) programmer I have a real love of Maps and how they can inform people with a single glance. It always saddens me when I see someone using them to mislead instead. Whether intentional or not, this map is obviously painting a picture that people on the far right will use to confirm their belief that the Obama administration is the cause of the unemployment uptick when in fact he inherited the sliding economy from his predecessor who inherited it from his predecessor and the real cause of the increasing unemployment may have predated them all. Raw data displayed in a map like this is cool but without the professional analysis and interpretation of what it means, it's just begging to be misinterpreted.
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