The Illusion of Unemployment Rates

The unemployment rate has been hovering around 4.2%. But in today’s highly unsettled economy, many people feel this headline number from the Bureau of Labor Statistics doesn’t capture their economic struggles — from slow hiring to working two part-time jobs to recent graduates unable to find work in their fields. But as economist Kathryn Edwards points out, the U.S. Bureau of Labor Statistics also measures underemployment (currently 7.9%) as well as discouraged workers and many other indicators of labor market slack. But there’s one thing the government probably should not measure, and that’s skills mismatch, or being “overqualified” for the job you have. In this episode, we also go way, way back to the Great Depression, when social workers and advocates for the unemployed fought to get the government to measure joblessness at all.

Read more:

• True Rate of Unemployment [Ludwig Institute for Shared Economic Prosperity July 2025]
• Origins of the Unemployment Rate: The Lasting Legacy of Measurement without Theory. [David Card, UC Berkeley and NBER, February 2011]
• THE PHILADELPHIA NEGRO A Social Study — W. E. B. DuBOIS
• Case studies of unemployment, compiled by the Unemployment Committee of the National Federation of Settlements
• Table A-15. Alternative measures of labor underutilization - 2025 M07 Results [U.S. Bureau of Labor Statistics]
• Table A-11. Unemployed people by reason for unemployment - 2025 M07 Results [U.S. Bureau of Labor Statistics]
• Table A-12. Unemployed people by duration of unemployment - 2025 M07 Results [U.S. Bureau of Labor Statistics]