Question

12a）What are three reasons the unemployment rate underestimates true unemployment?

Should we use a different form of unemployment rate that captures these groups? Is it more important to have an unemployment rate that we can measure accurately (like the one we have) or one that includes all the problems we care about (even if it's less accurate)?

Answer 1

The reasons why unemployment rate underestimates true unemployment is because

1) it doesn't consider the jobs what people have are low paying jobs.

2) it doesn't speak about the long term unemployment rate

3) it ignores marginally attached workers as well as discouraged workers

Yes we must have a different form of unemployment rate to capture what these groups actually say and this is most important because it gives the clear picture of where we stand currently and how we should be in our ways to approach certain problems of the country where the income equality, poverty levels etc are to be reduced on the whole.