Question

Which of the following statements correctly describe discouraged workers? (If none of the choices apply, leave all of the checkboxes blank.) Check all that apply.

   They are full-time workers who would like to work only part-time.
   They are counted as part of the labor force by the Bureau of Labor Statistics.
   They are dissatisfied with their current jobs and are considering quitting.
   They have not looked for a job in 4 weeks (or longer), but they would like a job and are available for work.
The following table contains U.S. employment information from July 2019.
Civilian Population
Employed
Unemployed
Discouraged
(Persons 16 years old and over)
(Persons)
(Persons)
(Persons)
259,225,000   157,288,000   6,063,000   368,000
The Bureau of Labor Statistics has several measures of joblessness in addition to the official unemployment rate. One alternative is the U-4 measure of labor underutilization, which is calculated as follows:
U-4    =     100×Unemployed+DiscouragedLabor Force + Discouraged
Fill in the following table by calculating the official unemployment rate and the U-4 measure of labor underutilization.
Official Unemployment Rate
U-4 Measure of Labor Underutilization
(Percent)
(Percent)
  
The official unemployment rate and the U-4 measure of labor underutilization are two different measures of joblessness in the economy.
If the Bureau of Labor Statistics were to include discouraged workers in the official unemployment rate, the reported unemployment rate would .

Answer 1

1. Discouraged workers “ They have not looked for a job in 4 weeks (or longer), but they would like a job and are available for work.”

2. Unemployment rate = unemployed / labour force * 100

Labour force = employed + unemployed = 157,288,000 + 6,063,000 = 16,33,51,000

= 6,063,000 / 16,33,51,000 * 100

= 3.71%

U-4 Measure of Labor Underutilization = 6431000 / 163719000 * 100 =   3.93 %

Labour force + discouraged = 163351000 + 368000 = 16,37,19,000

Unemployed + discouraged = 6063000 + 368000 = 64,31,000

If the Bureau of Labor Statistics were to include discouraged workers in the official unemployment rate, the reported unemployment rate would “increase”