Discouraged worker
Encyclopedia
Not to be confused with Disgruntled worker.
In economics
, a discouraged worker is a person of legal employment age who is not actively seeking employment or who does not find employment after long-term unemployment
. This is usually because an individual has given up looking or has had no success in finding a job, hence the term "discouraged".
In other words, even if a person is still looking actively for a job, he or she may have fallen out of the core statistics of unemployment rate after long-term unemployment and is therefore by default classified as "discouraged" (since this person does not appear in the core statistics of unemployment rate). In some cases, their belief may derive from a variety of factors including: a shortage of jobs in their locality or line of work; discrimination
for reasons such as age
, race
, sex
, religion, sexual orientation
, and disability
; a lack of necessary skills, training, or experience; or, a chronic illness or disability
.
As a general practice, discouraged workers, who are often classified as “marginally attached to the labor force”, "on the margins" of the labor force, or as part of "hidden unemployment", are not considered to be part of the labor force and are thus not counted in most official unemployment rates, which influences the appearance and interpretation of unemployment statistics. Although some countries offer alternative measures of unemployment rate, the existence of discouraged workers can be inferred from a low employment-to-population ratio
.
In the United States
, a discouraged worker is defined as a person not in the labor force who wants and is available for a job and who has looked for work sometime in the past 12 months (or since the end of his or her last job if one was held within the past 12 months), but who is not currently looking because of real or perceived poor employment prospects.
The Bureau of Labor Statistics
does not count discouraged workers as unemployed but rather refers to them as only "marginally attached to the labor force". This means that the officially measured unemployment captures so-called "frictional unemployment" and not much else. This has led some economists to believe that the actual unemployment rate in the United States is higher than what is officially reported while others suggest that discouraged workers voluntarily choose not to work. Nonetheless, the U.S. Bureau of Labor Statistics has published the discouraged worker rate in alternative measures of labor underutilization under U-4 since 1994 when the most recent redesign of the CPS
was implemented.
The United States Department of Labor
first began tracking discouraged workers in 1967 and found 500,000 at the time. Today, In the United States
, according to the U.S. Bureau of Labor Statistics as of April 2009, there are 740,000 discouraged workers. There is an ongoing debate as to whether discouraged workers should be included in the official unemployment rate. Over time, it has been shown that a disproportionate number of young people, blacks, Hispanics and men, make up discouraged workers. Nonetheless, it is generally believed that the discouraged worker is underestimated because it does not include homeless people nor those who have not looked for nor held a job during the past twelve months and is often poorly tracked.
According to the U.S. Bureau of Labor Statistics, the top five reasons for discouragement are:
, discouraged workers are often referred to as "hidden unemployed" which can be traced to their behavioral pattern and are often described as "on the margins" of the labour force. Since the numbers of discouraged workers and of unemployed generally move in the same direction during the business cycle
and the seasons (both tend to rise in periods of low
economic activity and vice versa), some economist
s have suggested that discouraged workers should be included in the unemployment numbers because of the close association.
The information on the number and composition of the discouraged worker group in Canada
originates from two main sources. One source is the monthly Labour Force Survey (LFS), which identifies persons who looked for work in the past six months but who have since stopped searching. The other source is the Survey of Job Opportunities (SJO), which is much closer in design to the approach used in many other countries. In this survey, all those expressing a desire for work and who are available for work are counted, irrespective of their past job search activity.
In Canada
, while discouraged workers were once less educated than "average workers", they now have better training and education, but they nonetheless still tend to be concentrated in areas of high unemployment. Discouraged workers are not seeking a job for one of two reasons: labour market-related reasons (worker discouragement, waiting for recall to a former job or waiting for replies to earlier job search efforts) and personal and other reasons (illness or disability, personal or family responsibilities, going to school, and so on).
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
, a discouraged worker is a person of legal employment age who is not actively seeking employment or who does not find employment after long-term unemployment
Unemployment
Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...
. This is usually because an individual has given up looking or has had no success in finding a job, hence the term "discouraged".
In other words, even if a person is still looking actively for a job, he or she may have fallen out of the core statistics of unemployment rate after long-term unemployment and is therefore by default classified as "discouraged" (since this person does not appear in the core statistics of unemployment rate). In some cases, their belief may derive from a variety of factors including: a shortage of jobs in their locality or line of work; discrimination
Discrimination
Discrimination is the prejudicial treatment of an individual based on their membership in a certain group or category. It involves the actual behaviors towards groups such as excluding or restricting members of one group from opportunities that are available to another group. The term began to be...
for reasons such as age
Ageism
Ageism, also called age discrimination is stereotyping of and discrimination against individuals or groups because of their age. It is a set of beliefs, attitudes, norms, and values used to justify age based prejudice, discrimination, and subordination...
, race
Racism
Racism is the belief that inherent different traits in human racial groups justify discrimination. In the modern English language, the term "racism" is used predominantly as a pejorative epithet. It is applied especially to the practice or advocacy of racial discrimination of a pernicious nature...
, sex
Sexism
Sexism, also known as gender discrimination or sex discrimination, is the application of the belief or attitude that there are characteristics implicit to one's gender that indirectly affect one's abilities in unrelated areas...
, religion, sexual orientation
Heterosexism
Heterosexism is a system of attitudes, bias, and discrimination in favor of opposite-sex sexuality and relationships. It can include the presumption that everyone is heterosexual or that opposite-sex attractions and relationships are the only norm and therefore superior...
, and disability
Ableism
Ableism is a form of discrimination or social prejudice against people with disabilities. It is known by many names, including disability discrimination, physicalism, handicapism, and disability oppression...
; a lack of necessary skills, training, or experience; or, a chronic illness or disability
Disability
A disability may be physical, cognitive, mental, sensory, emotional, developmental or some combination of these.Many people would rather be referred to as a person with a disability instead of handicapped...
.
As a general practice, discouraged workers, who are often classified as “marginally attached to the labor force”, "on the margins" of the labor force, or as part of "hidden unemployment", are not considered to be part of the labor force and are thus not counted in most official unemployment rates, which influences the appearance and interpretation of unemployment statistics. Although some countries offer alternative measures of unemployment rate, the existence of discouraged workers can be inferred from a low employment-to-population ratio
Employment-to-population ratio
The Organization for Economic Co-operation and Development defines the employment rate as the employment-to-population ratio. This is a statistical ratio that measures the proportion of the country's working-age population that is employed...
.
United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, a discouraged worker is defined as a person not in the labor force who wants and is available for a job and who has looked for work sometime in the past 12 months (or since the end of his or her last job if one was held within the past 12 months), but who is not currently looking because of real or perceived poor employment prospects.
The Bureau of Labor Statistics
Bureau of Labor Statistics
The Bureau of Labor Statistics is a unit of the United States Department of Labor. It is the principal fact-finding agency for the U.S. government in the broad field of labor economics and statistics. The BLS is a governmental statistical agency that collects, processes, analyzes, and...
does not count discouraged workers as unemployed but rather refers to them as only "marginally attached to the labor force". This means that the officially measured unemployment captures so-called "frictional unemployment" and not much else. This has led some economists to believe that the actual unemployment rate in the United States is higher than what is officially reported while others suggest that discouraged workers voluntarily choose not to work. Nonetheless, the U.S. Bureau of Labor Statistics has published the discouraged worker rate in alternative measures of labor underutilization under U-4 since 1994 when the most recent redesign of the CPS
CPS
-Australia:*Corporate Protective Services, Sydney based GPS monitoring company*Chatswood Public School, a school in Sydney-Bangladesh:*Criminology and Police Science, CPS is a discipline studied by the department at Mawlana Bhashani Science and Technology University in Tangail, Bangladesh. Md...
was implemented.
The United States Department of Labor
United States Department of Labor
The United States Department of Labor is a Cabinet department of the United States government responsible for occupational safety, wage and hour standards, unemployment insurance benefits, re-employment services, and some economic statistics. Many U.S. states also have such departments. The...
first began tracking discouraged workers in 1967 and found 500,000 at the time. Today, In the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, according to the U.S. Bureau of Labor Statistics as of April 2009, there are 740,000 discouraged workers. There is an ongoing debate as to whether discouraged workers should be included in the official unemployment rate. Over time, it has been shown that a disproportionate number of young people, blacks, Hispanics and men, make up discouraged workers. Nonetheless, it is generally believed that the discouraged worker is underestimated because it does not include homeless people nor those who have not looked for nor held a job during the past twelve months and is often poorly tracked.
According to the U.S. Bureau of Labor Statistics, the top five reasons for discouragement are:
- The worker thinks no work is available.
- The worker could not find work.
- The worker lacks schooling or training.
- The worker is viewed as too young or too old by the prospective employer.
- The worker is the target of various types of discrimination.
Canada
In CanadaCanada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
, discouraged workers are often referred to as "hidden unemployed" which can be traced to their behavioral pattern and are often described as "on the margins" of the labour force. Since the numbers of discouraged workers and of unemployed generally move in the same direction during the business cycle
Business cycle
The term business cycle refers to economy-wide fluctuations in production or economic activity over several months or years...
and the seasons (both tend to rise in periods of low
economic activity and vice versa), some economist
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
s have suggested that discouraged workers should be included in the unemployment numbers because of the close association.
The information on the number and composition of the discouraged worker group in Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
originates from two main sources. One source is the monthly Labour Force Survey (LFS), which identifies persons who looked for work in the past six months but who have since stopped searching. The other source is the Survey of Job Opportunities (SJO), which is much closer in design to the approach used in many other countries. In this survey, all those expressing a desire for work and who are available for work are counted, irrespective of their past job search activity.
In Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
, while discouraged workers were once less educated than "average workers", they now have better training and education, but they nonetheless still tend to be concentrated in areas of high unemployment. Discouraged workers are not seeking a job for one of two reasons: labour market-related reasons (worker discouragement, waiting for recall to a former job or waiting for replies to earlier job search efforts) and personal and other reasons (illness or disability, personal or family responsibilities, going to school, and so on).
See also
- labor forceLabor forceIn economics, a labor force or labour force is a region's combined civilian workforce, including both the employed and unemployed.Normally, the labor force of a country consists of everyone of working age In economics, a labor force or labour force is a region's combined civilian workforce,...
- unemploymentUnemploymentUnemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...
rate - workforceWorkforceThe workforce is the labour pool in employment. It is generally used to describe those working for a single company or industry, but can also apply to a geographic region like a city, country, state, etc. The term generally excludes the employers or management, and implies those involved in...
- Types of unemployment
External links
- Discouraged workers, OECD Stats extract
- Incidence of discouraged workers, OECD
United States
- Discouraged workers in glossary, U.S. Bureau of Labor Statistics Division of Information Services
- Employment Situation Summary, U.S. Bureau of Labor Statistics Division of Information Services
- Alternative measures of labor underutilization, U.S. Bureau of Labor Statistics Division of Information Services
- Discouraged Worker, Investopedia
- Down And Out: "Discouraged" Workers, TimeTime (magazine)Time is an American news magazine. A European edition is published from London. Time Europe covers the Middle East, Africa and, since 2003, Latin America. An Asian edition is based in Hong Kong...
magazine - Actual U.S. Unemployment: 15.8%, The Washington PostThe Washington PostThe Washington Post is Washington, D.C.'s largest newspaper and its oldest still-existing paper, founded in 1877. Located in the capital of the United States, The Post has a particular emphasis on national politics. D.C., Maryland, and Virginia editions are printed for daily circulation...
- 'Hidden Unemployment' Inflates State's Real Jobless Figures, The Hartford CourantThe Hartford CourantThe Hartford Courant is the largest daily newspaper in the U.S. state of Connecticut, and is a morning newspaper for most of the state north of New Haven and east of Waterbury...
- Tracking the Long-Term Unemployed and Discouraged Workers, The Heritage Foundation
- Ranks of Discouraged Workers and Others Marginally Attached to the Labor Force Rise During Recession Issues in Labor Statistics, U.S. Bureau of Labor Statistics Division of Information Services
- Discouraged Workers, Drexel
- Jobless statistics overlook many, San Francisco ChronicleSan Francisco Chroniclethumb|right|upright|The Chronicle Building following the [[1906 San Francisco earthquake|1906 earthquake]] and fireThe San Francisco Chronicle is a newspaper serving primarily the San Francisco Bay Area of the U.S. state of California, but distributed throughout Northern and Central California,...
- PROMOTING ECONOMIC OPPORTUNITY AND OWNERSHIP
- Labor force characteristics, Labor Force Statistics from the Current Population Survey