Catherwood LibraryILR School

While the 5 percent unemployment rate appears consistent with a jobless rate conducive to stable inflation and possible economic expansion and full employment, economist Jared Bernstein argues that underemployment remains too high at 9.8 percent. Previous economic booms and expansion cycles will typically see underemployment rates as low as 7 percent. Underemployment, referred to as U6 by the Bureau of Labor Statistics, is a measure of three categories – the unemployed, part-timers who would rather be full-time, and “marginally attached” employees who are not working or actively searching, but would take a position if a good opportunity became available. The underemployed figure generally concerns the “the involuntary part-timers” continuum, where whether a worker is working as much as desired reflects the strength of the labor market. U6 rose steeply due to the Great Recession, but other foundational changes may have contributed, including a shift to service industries and “just-in-time” staffing scenarios.