Oct 27, 2008

Marginally attached workers

The most commonly reported unemployment statistic is the total unemployed as a percentage of the civilian workforce (U-3), which stands at 6.1% as of September 2008. However, the Bureau of Labor Statistics publishes other measures of unemployment, such as the U-6, which adds both "marginally attached workers" and those employed part-time for economic reasons. How are these groups defined?

Marginally attached workers are persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not looking currently for a job. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule.

So it would seem that the conventional measure of unemployment doesn't fully capture our employment situation. The U-6 sits at 11.0% as of September 2008 and the following graph from the Wall Street Journal shows how the U-6 (labor underutilization) has changed over time. The graph on mass layoffs is also interesting, I had to look up the explanation of the previous spike in 2005 - it was attributed to damage from hurricane Katrina that led to layoffs, primarily in the southern states that were affected by the storm. To put the data in absolute rather than relative terms, the BLS has another report that indicates the number of workers who left the labor force due to discouragement over job prospects increased from 276,000 to 467,000 year over year for September.

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