I've gotten questions about whether to emphasize U-6 as the "true unemployment rate". It is currently 11.1%.

I don't because I think the concept doesn't add much, it misses how unusually bad the labor market is now, is analytically flawed, and can be misleading.

Thread:

The official unemployment rate is 6.3%. It is unemployed (people looking for work) divided by the labor force (working or looking for work).

U-6 is 11.1%, it adds in "marginally attached" (discouraged workers & would take a job if it came along) and involuntary part-time.
DOESN'T ADD MUCH. U-6 is one of several alternative unemployment concepts produced monthly by the BLS. They are all useful to look at. But they also all pretty much up and down together so they rarely tell much of a different story.
MISSES HOW UNUSUALLY BAD THE LABOR MARKET IS NOW. The last time U-6 was around 11.1% the unemployment rate was 5.7%. If anything based on historic relationships U-6 makes the labor market seem bad (like in 2015) but not terrible (like in 2012).
The reason is that a large part of U-6 is part time for economic reasons (aka involuntary part time). This is up but actually not up an unusually large amount given the increase in unemployment. We've seen a lot of jobs lost but people with jobs, on average, working longer.
ANALYTICALLY FLAWED. U-6 puts equal weight on someone who cannot find a job and someone who can only find a 20 hr/week job but wants 40 hours. Both are problems but the former is worse. I sometimes use my own construct of U-5.5 which places half weight on involuntary unemployed.
MISLEADING. If we always used U-6 then we would get used the units and their historical comparisons. Many compare current U-6 to what the official rate used to be.

Also shift based on convenience (e.g., Trump shifted from Obama economy bad using U-6 to his good with U-3).
The best is to thoughtfully look at a range of indicators: official unemployment, participation, employment-population rate, U-6, hours, etc. But not everyone would look at all and I wouldn't replace that with a single-minded focus on U-6.
If you can only look at 1 number, then maybe Jay Powell's 10% or Willie Powell (no relation that he has admitted to me) & my 8.3% realistic UR. Both show the labor market is even worse than what you would think from the 6.3% headline unemployment rate. https://t.co/3LiH2FBSb2

More from Society

This is a piece I've been thinking about for a long time. One of the most dominant policy ideas in Washington is that policy should, always and everywhere, move parents into paid labor. But what if that's wrong?

My reporting here convinced me that there's no large effect in either direction on labor force participation from child allowances. Canada has a bigger one than either Romney or Biden are considering, and more labor force participation among women.

But what if that wasn't true?

Forcing parents into low-wage, often exploitative, jobs by threatening them and their children with poverty may be counted as a success by some policymakers, but it’s a sign of a society that doesn’t value the most essential forms of labor.

The problem is in the very language we use. If I left my job as a New York Times columnist to care for my 2-year-old son, I’d be described as leaving the labor force. But as much as I adore him, there is no doubt I’d be working harder. I wouldn't have stopped working!

I tried to render conservative objections here fairly. I appreciate that @swinshi talked with me, and I'm sorry I couldn't include everything he said. I'll say I believe I used his strongest arguments, not more speculative ones, in the piece.

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