We're all aware to some degree or other that unemployment is now somewhat over 10%. We also understand to some degree that 10% is a lot of unemployed people - 1 out of 10 of us is out of work. But, as this article outlines, the real number that we should be focusing on indicates that closer to 1 in 5 people is really in need of a job.
The difference between 1 in 10 and 1 in 5 is the difference between the U-3 rate and the U-6 rate. U-3 measures the number of people out of a job and actively searching for a new one. That's the statistic that was at 10.2% for October. It's also the number generally cited by any news reports on unemployment. Arguably the more critical number relative to the health of the economy is the U-6 rate, which clocked in at 17.5% in October. U-6 is the statistic that includes everyone counted in U-3 plus "discouraged" workers (i.e. those who don't have a job and have stopped actively looking for a new one) plus those who are only working part-time but want full-time work and others who are underemployed. The number of people that an expanding economy must absorb back into the work force is represented much better by the U-6 rate than the U-3 rate. And even U-6 doesn't reflect the new workers that are being generated every year by new cohorts of high school and college graduates coming into the workforce for the first time.
The sheer magnitude of the U-6 number is one of the reasons that many are concerned that any recovery may be "jobless" or seem that way for quite a long time. We've got to add back an awful lot of jobs before we start to absorb all those people in the 7.3% of the workforce above and beyond the 10.2% U-3 number.
Anyone who as been paying attention to recent postings here (all 2 of you) also know that recent research shows that the vast majority of net new jobs in the U.S. economy over the past 20 or more years have been generated by young (not just small, but relatively new) companies. Unless something is happening to totally change that fact - and to my knowledge nobody thinks that something that fundamental is changing in the economy - that means that the companies that are going to hire most of the unemployed and underemployed are companies that were started within the past five years or will be started in the next two or three years. And with startup activity apparently down over the last year or so - and with attitudes and policies in Washington that are in many cases hostile to young and small business - it becomes even more difficult to see how the U-6 number comes down significantly or rapidly over the next few years.