September 26, 2012
(Un)Employment in America: The U-6 Rate
The U-6 Rate is considered one of the most popular measures of unemployment in the libertarian community. U-6 covers individuals who are not only unemployed, but those who are 'marginally attached.' Marginally attached are individuals who come in and out of the labor force, but are willing to accept a job at any time. The headline unemployment rate does not count these people when they "leave" the labor force. "Leaving" the labor force includes not looking for work, or being unemployment longer than a certain period of time.
U-6 also covers individuals who are working part-time for "economic reasons," or people who would work full-time if the hours were available. In total, this gives a clearer picture of how the labor market is actually performing. Currently, the U-6 rate is over 14% and has moved in line with the "headline" unemployment rate over the past several years.
It's important to note that people "not" looking for a job are probably actually looking. I've included a video at the bottom describing the volatility in the non-labor force that is searching for a job. These people should be noted as unemployed.
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