Alternative unemployment rates
How is unemployment calculated? Is it just folks without a job? What about people who are working but not in the occupations they trained for? Are they ever factored into the unemployment figures? N.C. State University extension economist Mike Walden answers.
“Well … the federal government actually produces six, six different unemployment rates every month. One of them — what we call the headline rate — is the one that gets all the attention. This is the one you’ll see printed in the newspapers and talked about in the media. This is the one that is based on counting as people who are unemployed those folks who are looking for work — who want a job, but who are out actively hitting the pavement looking for work. And for example at the national level in November that rate was 9.8 percent.
“However if you go back and you include those folks who have given up looking for work — we know they are unemployed; they just say to the survey, ‘Hey, I’ve looked everywhere I can’t find a job.’ — if you include those folks back into the unemployment rate, then the November rate would go up to 11.3 percent.
“And then if you expand further and say, ‘Well, there have got to be people out there who are working but they are working at a part-time job. They really want a full-time job, but they can’t find a full-time job because of the economy, so they are working at a part-time job,’ if we count those folks as unemployed then the national rate in November would go up to 17 percent.
“So those are the three most popular unemployment rates. Now there is certainly an idea that says that, well, there are some people out there even working full-time jobs who aren’t working in the job that they got trained for, might we have a number for them? Unfortunately, we don’t have a number for those folks. They are called the underemployed. We have some estimates.
“But 17 percent would be the highest unemployment based on the most comprehensive view of unemployment by the federal government.”Category: Economic Perspective