Highest U-6 Unemployment Rate Posted in Post-WWII Era

-- logo - bureau of labor statistics --The "official" unemployment rate that is used by the federal government is the U-3 rate, which is defined as "total unemployed, as a percent of the civilian labor force". This number was 9.8% in September of 2009.

The U-6 rate, which is considered to be a more all-encompassing measure of the employment situation in the United States, is defined like this:

"Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian force plus all marginally attached workers".

The U-6 rate in September was 17%, which is the highest such rate posted in the post-WWII era.

The U-6 rate is also known as the "unemployed and underemployed rate", as it includes people who want full-time work but have to settle for a part-time job.

Let's give you a quick example of three different types of people who aren't included in the "official" unemployment rate:

1. Joe has an engineering degree but can't find full-time work in his field, so he has taken a 15 hour per week job at the local gas station to help pay some of his bills.

Joe is not included in the "official" unemployment rate as he has a job (even if it is part-time), but he is included in the U-6 rate, as he is considered to be "underemployed". Joe wants full-time work, but simply can't find it.

2. Samantha works in the banking industry, and was laid off from her job about a year ago.

Samantha wants a job, but has not actually gone out and applied anywhere for the past couple of months. She submitted a number of resumes and had a few interviews over the 12 months, but no jobs materialized from her efforts.

Samantha has a bit of savings and has decided to wait until the beginning of 2010 to seriously look for full-time employment, as she figures that the economy will have started to improve by then.

Samantha is not included in the "official" unemployment rate, even though she is out of a job and wants full-time work.

3. Mike spent four years in the IT industry, working for several Fortune 500 companies before being laid off earlier in the year.

Mike is so disillusioned with the industry that he has simply given up on trying to find another job for the time being.

Instead of trying to find a job, Mike is learning some new things that he hopes will make him more employable when the job market starts to tick higher.

Mike qualifies as a "discouraged worker" and is not included in the "official" unemployment rate of 9.8%, even though he would definitely be working a full-time job if he could find one.


The U-3 unemployment rate is bad enough, ticking up to its highest level in over 25 years.

However, the U-6 unemployment rate is positively chilling when you consider the fact that 1 out of every 6 working Americans are considered either underemployed or unemployed.

That's an incredible number of people who need to find full-time work, and you really have to wonder where they will all find their jobs.

Source: Definition of U-6 Unemployment Rate

Filed under: The Economic Meltdown

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