Suppose someone complains to you that the government under-reports unemployment for political reasons (it makes the...

Suppose someone complains to you that the government under-reports unemployment for political reasons (it makes the president look better). Use the concepts of U-5 and U-6 to explain to them why they are wrong.

Expert Solution

The concern and debate that unemployment data are manipulating for polutical reasons in U.S. But when we analyse the types of unemployed persons, we can see a clear distinction between perfect unemployment and other types of unemployment. The measurements like U-5 and U-6 can be regarded as an alternative framework to measure unemployment. U-5 and U-6 measures the discouraged workers. It includes the marginally attached workers. By analysing the criteria of unemployed workers and job seekers with certain durations, the facts and figures may be true. It only reflects the accurate depth of unemployment. We cant actually call every job seekers as unemployed, some of them are under employed.

Rahul Sunny answered 2 years ago

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