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Wednesday, Oct. 21, 2020

Does the official unemployment rate count everyone who wants a full-time job and can’t find one?

Austin Tannenbaum, Gigafact
no

The Labor Department's official unemployment rate tracks only those without a job who are actively seeking work. It excludes "discouraged" workers who have not sought work in the past four weeks and part-time workers who report that they would prefer full-time work. The 2020 unemployment rate peaked in April at 14.7%. In September, it dropped to 7.9%.

The Ludwig Institute for Shared Economic Prosperity, a nonpartisan group that advocates for lower-income Americans, developed an alternative measure that it calls the "true rate." It includes individuals who desire additional work and those who have work but make less than $20,000 a year. Using Labor Department survey data, it calculated that the "true rate" in April was 32.6% for all workers, 34.8% for Black workers, and 30.7% for White workers. In September, those numbers declined to 26.1%, 32%, and 24.3% respectively.

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