Question

As of Dec 2017 the United State's unemployment rate was 4.1%. Explain how this number could be understating the number of people who are "unemployed".

Answer 1

Unemployment rate can be understated due to many reasons . The number of discouraged workers as well as part-time workers are not often taken into consideration while calculating unemployment rate. Discouraged workers are those who are willing to get a job but are unable to do so. They should be included in the unemployment rate calculations. On the other hand, part-time workers are those who are forced to work less since their productive efforts are not required by employers . But they should also be taken into account while calculating the unemployment rate.