Hidden unemployment refers to individuals who are not counted in the official unemployment statistics but are still without work and may want a job. This category includes:
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Discouraged Workers: Those who have given up looking for work due to a belief that no jobs are available for them or that they wouldn't meet hiring criteria.
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Underemployed Workers: Individuals who are working part-time but desire full-time work or those who are employed in jobs that do not utilize their skills or education.
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Marginally Attached Workers: People who are not currently in the labor force but have looked for work in the past year, which often includes discouraged workers.
These groups impact the official unemployment rate because such measures typically focus only on individuals actively seeking employment (i.e., those who are unemployed). As a result, hidden unemployment can lead to an underestimation of the true level of unemployment in the economy. Consequently, the official unemployment rate may appear lower than it actually is, obscuring the challenges that many people face in the labor market and the true health of the economy.
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