EJ Antoni/Heritage writes alarmingly about how excluding marginally attached workers from the calculation of unemployment is misleading:
Once you factor in the millions of people missing from the labor market (don’t have jobs but are excluded from official unemployment calculation), the unemployment rate jumps from 4.2% to somewhere btwn 7.0% and 8.5%, depending on methodology:
Indeed U6 — which incorporates marginally attached workers into the calculation of unemployment — is higher than U3.
Figure 1: Official unemployment rate (U3) (blue), and total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force (U6) (tan). NBER defined peak-to-trough recession dates shaded gray. Source: BLS, NBER.
U6 is indeed higher than U3 by 3.7 ppts. Over the sample shown above, the gap is on average…4.5 ppts.