Unemployment Measurement Is Flawed

Saint Paul, Minnesota
March 19, 2009
By Marty Owings

When you hear the unemployment figures mentioned in the news, what you're hearing is the U.S. Department of Labor measure of one set of statistics. What you're not hearing about are those who might be underemployed, employed part-time but seeking full-time, those with barriers to full-time employment and those who've exhausted their unemployment benefits.

Majority Leader Tony Sertich (DFL) today gave testimony about a bill he has proposed (H.F. 925) that would use a broader definition of unemployment and one that many say would be more accurate. The measure, called u6 and used by the Department of Labor includes the current unemployment measure, plus discouraged workers, those working part time who want a full time position, plus marginally attached workers and is considered by experts to be the broadest and most accurate measure of Unemployment.

Here are the measures currently used by the Department of Labor.

U1 = Persons unemployed 15 weeks or longer, as a percent of the civilian labor force
U2 = Job losers and persons who completed temporary jobs, as a percent of the civilian labor force
U3 = Total unemployed, as a percent of the civilian labor force (the official unemployment rate)
U4 = Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers
U5 = Total unemployed, plus discouraged workers, plus all other marginally attached workers as a percent of the civilian labor force plus all marginally attached workers
U6 = Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers

Note: Marginally attached workers are those who 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 marginally attached workers, have given a job-market-related reason for not currently looking 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.

Sertich was questioned by some on the committee about the bill. Rep. Anderson (R) asked Sertich if Minnesota would be the only State using these figures. He answered by saying that Minnesota would be the first state, but quickly added that Minnesota would also use the same existing measures that other states use so that comparisons could easily be made. Sertich added that the numbers in the U6 measure were more honest and that Minnesota has an oppotunity to lead in this area.

Here are the details of the bill.

https://www.revisor.leg.state.mn.us/bin/bldbill.php?bill=H0925.0.html&session=ls86