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Shutdowns will inevitably cause job loss and with the lockdown of almost all the country earlier this year, tracking unemployment rates is more important than ever.  This begs the question; how do you quantify unemployment?  

There are two common ways to track unemployment, U-3, and U-6.  U-3’s technical definition according to the US government is, “Total unemployed, as a percent of the civilian labor force” and is the “official unemployment rate.”  Due to its official status, you will most likely see U-3 in the news or a quick google search about unemployment.  U-6 is U-3’s counterpart.  U-6 is sometimes called “real unemployment” and is defined by the US government as “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.”  In layman's terms, the definition means:  anyone who does not have a job or has part-time employment but wants to work full-time.  

There is another difference between these two figures.  The word unemployed that is used in U-6 represents anyone who does not have a job, while in U-3 it means anyone who wants employment but cannot find it.  This different definition plus the added part-time employees causes U-6 to typically be twice that of U-3.

As you may have seen, both rates have steadily dropped since their spike in April of this year.  In April, U-3% was at 14.7 now it is at 7.9%, U-6 was 22.8% now it is 12.8%.  Falling unemployment rates are beneficial for many reasons.  First, more people have jobs bringing in income to them and their families.  More families and individuals with incomes mean less reliance on debt, which is good for the financial stability of the country.  Next, falling unemployment indicates a growing economy. In our case, this means a step towards full recovery.  Finally, a decreasing unemployment rate is beneficial for the mental health of the country. 

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Kevin Sheridan

Kevin Sheridan is an internationally-recognized Keynote Speaker, a New York Times Best Selling Author, and one of the most sought-after voices in the world on the topic of Employee Engagement. For five years running, he has been honored on Inc. Magazine’s top 101 Leadership Speakers in the world, as well as Inc.’s top 101 experts on Employee Engagement. He was also honored to be named to The Employee Engagement Award’s Top 100 Global Influencers on Employee Engagement for three consecutive years, as well as being designated as a Senior Fellow at The Conference Board. Having spent thirty years as a high-level Human Capital Management consultant, Kevin has helped some of the world’s largest corporations rebuild a culture that fosters productive engagement, earning him several distinctive awards and honors. Kevin’s premier creation, PEER®, has been consistently recognized as a long-overdue, industry-changing innovation in the field of Employee Engagement. His first book, Building a Magnetic Culture, made six of the best seller lists including The New York Times, Wall Street Journal, and USA Today. He is also the author of The Virtual Manager, which explores how to most effectively manage remote workers. Kevin received a Master of Business Administration from the Harvard Business School in 1988, concentrating his degree in Strategy, Human Resources Management, and Organizational Behavior. He is also a serial entrepreneur, having founded and sold three different companies.

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