Question

In the context of economic definitions of the labor force, employment and unemployment, explain

why some people who are not working, are not counted as unemployed. Also explain where people who
are known as discouraged workers fit within this classification system.

Answer 1

Some people who are not working are not counted as unemployed due to part-time or temporary jobs, or being underemployed. Discouraged workers also fit into this classification.

Step-by-step explanation:

The categorization of employed, unemployed, or out of the labor force can sometimes mislabel certain individuals. There are people who have part-time or temporary jobs and are looking for full-time and permanent employment, but they are still counted as employed. This is because they are technically working, even though it may not be in the way they prefer.

Additionally, there are individuals who are underemployed, meaning they have skills or qualifications for a higher-level job but are working in a lower-paying or less-skilled position. These individuals are also counted as employed. All of these situations fall under the term 'hidden unemployment'. Discouraged workers, who have given up looking for employment and are no longer counted in the unemployed category, also fall into this classification system.