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Counting the margin: Real unemployment for August 2010

The government has traditionally represented unemployment as those people who are currently seekin full-time employment. Anyone who has surrendered the job hunt is 'on the margin', and not counted.

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Total unemployment from mid-1997 to the present. The blue line represents everyone out of work, whether or not they are currently job hunting ('U-6'). The red line is the number the government publishes, which only represents people who are actively seeking employment ('U-3').

罢辞诲补测鈥檚 showed that in August 鈥渢otal unemployment鈥 including all marginally attached workers climbed to 16.7% while the traditionally reported unemployment rate also increased slightly to 9.6%.

The traditional unemployment rate is calculated from the monthly household survey results using a fairly explicit definition of 鈥渦nemployed鈥 (essentially unemployed and currently looking for full time employment) leaving many workers to be considered effectively 鈥渙n the margin鈥 either employed in part time work when full time is preferred or simply unemployed and no longer looking for work.

The Bureau of Labor Statistics considers 鈥渕arginally attached鈥 workers (including discouraged workers) and persons who have settled for part time employment to be 鈥渦nderutilized鈥 labor.

The broadest view of unemployment would include both traditionally unemployed workers and all other underutilized workers.

To calculate the 鈥渢otal鈥 rate of unemployment we would simply use this larger group rather than the smaller and more restrictive 鈥渦nemployed鈥 group used in the traditional unemployment rate calculation.

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