What Is a Discouraged Worker?

A discouraged worker is a person who is eligible for employment and can work, but who is currently unemployed and has not attempted to find employment in the last four weeks. Discouraged workers usually have given up on searching for a job because they foun🐼d no suitable employment options or failed to s💮ecure a job when they applied.

Understanding Discouraged Workers

The U.S. Department of Labor’s Bureau of Labor Statistics (BLS) defines discouraged workers as “those persons not in the labor force who want and are available for work, and who have looked for a job sometime in the prior 12 months, but were not counted as unemployed because they had not searched for work in the four weeks preceding the survey.” The BLS adds that “discouraged workers were not currently looking for work specifically because they believed no jobs were available for them or there were none for which they would qualify.”

As discouraged workers are no longer looking for employment, they are not counted as active in the labor force. This means that the headline 澳洲幸运5开奖号码历史查询:unemployment rate, which is based solely on the active labor force number, does not take into account the nu🉐mber of discourඣaged workers in the country.

Causes for Worker Discouragement

The causes for worker discouragement are complex and varied. In some cases, workers fall out of the workforce because they are not equipped to deal with technological change in their workplace. An example of this occurred during the 澳洲幸运5开奖号码历史查询:Great Recession, when the manufacturing sector shed senior staff unable to work on the new computer numeric control (CNC) machines, used for cutting wood and other hard materials, according to a report by The Washington Post.

Nick Eberstadt of the American Enterprise Institute (AEI) has blamed the “flight from work” on a lack of supply of skilled, able, and willing workers and an increasing reliance on 澳洲幸运5开奖号码历史查询:disability insurance. His theory is backed by Alan Krueger’s 2016 research, which found that self-reported pain and disability insurance was higher among discouraged workers.

Other possible reasons for discouraged workers include restrictions that limit employment options for formerly incarcerated individuals and jobs that are perceived as being inaccessible to a specific gender.

BLS Accounting for Discouraged Workers

To better analyze unemployment in the U.S., the BLS created alꦚternative measures for the underutilization of labor. U-4, U-5, and U-6 capture discouraged workers.

• U-4 equals the total number of unemployed people, plus discouraged workers.
• U-5 equals the total number of unemployed people, discouraged workers, and other marginally attached workers.
• U-6 equals the total number of unemployed people, all marginally attached workers, plus people employed part-time who are seeking full-time employment.

From the second quarter of 2023 through the first quarter of 2024, the U-4 rate, seasonally adjusted, was 3.9%, just a shade higher than the headline, or official, unemployment rate of 3.7%.

In spite of the pandemic's impact on the economy, the current U-4 number is not as bad as the 2009 annual average, which stood at 9.7% in the throes of the Great Recession.

Helping the Discouraged

The U-4 rate helps to quantify how many discouraged workers exist and keep tabs on t🦄he change in their numbers. Further analysis of age groups, race, and geographic location is also made possible by U-4 measures.

Policymakers at federal, state, and local levels can use these numbers to formulate plans to assist them. Such plans may consist of training programs, education 澳洲幸运5开奖号码历史查询:subsidies, or 澳洲幸运5开奖号码历史查询:tax credits for companies that hire long-term un🌳em𓄧ployed individuals.

The Bottom Line

Discouraged workers are those who are not employed or actively looking for work. In the United States, these workers are considered ไto have left the labor force. Because they are not counted in the official unemployment figure this omission can lead to miཧsunderstandings of the actual employment situation.