Question

In the June 2020, the Bureau of Labor Statistics (BLS) announced that they had possibly miscalculated the official U.S. unemployment rate for the last three months. The BLS said that they "underestimated" the unemployment rate (for March, April, and May) because of how furloughed workers had been classified. What's a furloughed worker, and should they be considered "employed", "unemployed", or "neither"?

Answer 1

Furloughed worker:

A worker becomes furlough if his/her job is ceased by the employer but still in employment without pay. This situation arises when so many workers may become furlough because of the crisis in the economy or employer. Example: Due to COVID-19 pandemic, so many workers are furloughed now due to poor economic situation.

Unemployed:

Although they retain their employment, they should not be considered as Employed but should be considered as unemployed. There are three reasons behind it as below:

#1) they are eligible to get unemployment claim benefits from the government: therefore, once the government pays to them, they should be treated unemployed.

#2) there is no fixed term of being furloughed (may be short-term or long-term). Such uncertainty makes them to treat unemployed.

#3) there is no guarantee of getting jobs back. Therefore, uncertainty prevails in the labor market.