By Bhaskar Prasad: Subscribe to Bhaskar's RSS feed
January 7, 2012 2:07 AM EST
According to official figures released by the U.S. government, unemployment rates in the country are hovering around 8.6 percent. However, the American Enterprise Institute (AEI) suggests that a better measure of the real jobless rate -the U-6 - stands at 15.6 percent.
The AEI's rate includes those individuals who would like a job and have been looking for employment for the last twelve months and not just the last four weeks. The agency believes therefore the number of Americans hurt by the bad economy is almost twice what the official number would suggest.
According to the AEI, the official rate excludes workers who have decided to drop out of the labor market altogether, either because they are discouraged or for other reasons. This rate also ignores workers who settle for part-time work because they are unable to find a full-time job.
Aparna Mathur, an economist with the AEI, and researcher Matt Jensen, have found that currently more than 5.7 million Americans, or 43 percent of all unemployed, have been in that state for more than 27 weeks.
As per the findings, the tremendous increase in long-term unemployment is one factor driving the unprecedented disparity between the official measure of unemployment and the alternative measure (U-6). The AEI also states that long-term unemployment has a damaging psychological impact on workers' willingness to keep searching for work and motivates them to accept part-time work.
Follow us
To report problems or to leave feedback about this article, e-mail:
To contact the editor, e-mail:
Are Record-Low Mortgage Rates Hurting The US Housing Market?
Airbus Smells Good Business In Wider Plane Seats For Bigger Americans
French, Germany Consumer Confidence Holding Up -- A Dangerous Sign of Euro Zone Crisis Fatigue?
US Stocks - Time To 'Sell In May And Go Away'?
Investors Love Rio: Why Foreign Companies Are Buying Into Brazil's Real EconomyWe value your privacy. Your email address will not be shared.
