Inspired by a post by mhr in a locked LBN thread:
(I know this is old ground for many here, but it bears repeating and bookmarking for when the "official" number (U3) comes down as we near the 04's. It is also helpful to remember these things during our "Jobless Recovery")
Snip:
The deal is that there are six government-sanctioned definitions of unemployment. The six measures produce a broad range of unemployment numbers. For April 2003, the range was a scant 2.5 percent to a scary 9.8 percent.
One of the midrange numbers, dubbed U-3 and defined as "total unemployed, as a percent of the civilian labor force," is the official unemployment rate.
• People with jobs are employed.
• People who are jobless but are looking for jobs and are available to work are unemployed.
• People who do not have jobs and are not looking or available for work are not in the labor force.
The official unemployment rate measures joblessness without including people in the third group. People in the third category -- such as "discouraged" job hunters who have temporarily given up looking because of the sour job market -- aren't counted in the official rate.
To catch these nearly invisible jobless or income-impaired people, look to three other less publicized unemployment measures:
• U-4, which estimates total unemployed plus discouraged workers. In April, U-4 was 6.1 percent.
• U-5, which estimates total unemployed plus discouraged workers plus all other "marginally attached" workers. (The marginally attached are those who are neither working nor looking for work but say they want a job and are available for one and have looked for work recently.) In April, U-5 was 6.7 percent.
• U-6, which estimates total unemployed plus marginally attached plus those who settled for part-time employment even though they want a full-time job. In April, U-6 was 9.8 percent.
In the U-6 category is the engineer who can't find an engineering job and so is working part time watering plants at the garden center. Here also is the retail clerk whose hours were cut back to 20 a week.
http://www.kansascity.com/mld/kansascitystar/business/5962629.htmAlso:
From a PBS Newshour report:
Snip:
PAUL SOLMAN: When the government adds the white-collar unemployed to out-of-work urban youth, plus the manufacturing workers who've borne the brunt of the recession and jobless recovery, it comes up with an average official unemployment rate of 6.4 percent, highest in a decade, and more than 50 percent higher than it was just two years ago. Now, there is a positive way to look at it. Today's 6.4 percent is nowhere near the post-depression record of 10.8 percent, set back in the recession of 1982. Chicago-based John Challenger, however, in the outplacement business since the early '80s, says unemployment is much worse than the official number suggests.
JOHN CHALLENGER: 6.4 percent only tells the first part of the story. There are discouraged workers. There are people who have been marginalized, and that puts unemployment up over 12 percent.
PAUL SOLMAN: John Challenger's extreme claim, first made to us on the phone, is what motivated this story, and what we came to Chicago to explore: That today's unofficial unemployment rate is much higher than the official 6.4 percent. And in fact, what we found suggests that for men in the workforce, today's number actually rivals the 10.8 percent record of 1982, because, it turns out, there are four factors suppressing today's official number, at least for men: Millions more discouraged workers than there were in 1982; millions more on disability; nearly 1.5 million more incarcerated men; and finally, there's a demographic factor. Today's is an older workforce. To make it comparable to 1982, the economists we spoke with would adjust today's number upward for that reason alone. And the same is true for each of these categories. Take discouraged workers, who aren't officially counted as unemployed unless they say they actively looked for work in the past four weeks.
http://www.pbs.org/newshour/bb/economy/july-dec03/unemployment_07-29.html
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