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How do part-time workers affect the unemployment rate?
Part-time workers are considered to be fully employed members of the labor force and thus are counted as such.
How does this understate, or underestimate, the rate of unemployment?
____________
In addition, what are some examples of discouraged workers?
Thanks.
1 Answer
- random_manLv 76 years ago
A part-time worker is considered "employed" (at least for the purposes of the official, or U3, rate). One could argue that this underestimates the rate of unemployment, as presumably some of those part-time workers want full-time jobs. This, however, is captured in the U6 rate. ("persons working part-time for economic reasons").
A "discouraged worker" is someone unemployed, says they want a job, but can't find anything they like, and has not looked for work recently. After 4 weeks of not looking, they drop from the U3 rate to U6, and after a year of not looking they are considered "no longer in the labor force". Examples could be: a stay-at-home spouse who gave up on finding a job they want; a person who was forced into early retirement and doesn't want to start over in a new career; or just someone who's given up on life and now plays xbox in mom's basement.
edit: I should note, this answer assumes you are in the US (I have no idea where you are).
