Question

What are some of the problems with using the unemployment rate as an accurate measure of overall joblessness?

Short answer

This is because there are varied situations arise in the economy overall.

Step-by-step solution

Step 1. Definition

Unemployed is a person who is constantly looking for a job or work and he/she is also capable of doing work but don’t able to get a job then they are unemployed.

In order to calculate the unemployment rate, the total number of unemployed people is divided by the total number of people in the labor force, which consists of both employed and unemployed people, and then the ratio is expressed as a percentage.

Step 2. Explanation

The unemployment rate's main problem is that it doesn’t include discouraged workers.

Discouraged workers are defined as the workers who have discontinued their looking for a job as they are not finding employment options and failed to be nominated for a job. Because of this they are discouraged and classified under discouraged workers.

Step 3. Conclusion

The unemployment rate also doesn’t include underemployed workers.