Why does the unemployment rate not always show the complete picture of joblessness in a country?
Answer (2)
The unemployment rate is commonly used to describe how many people in a country are jobless, but it does not always give the full picture. This is because the official unemployment rate only includes people who are actively looking for work in the past four weeks. It excludes many others who may also be without jobs.For example, in the Philippines, a person who gave up searching for a job because they’ve been rejected too many times is called a discouraged worker. Even though they are jobless and want to work, they are not included in the unemployment rate because they are not actively applying. This happens a lot in far-flung areas where job opportunities are few and transportation to city centers is expensive.Another limitation is that the unemployment rate does not count underemployed workers—those who have jobs but are working fewer hours than they want or are overqualified. For instance, a licensed engineer working as a delivery rider because there are no available engineering jobs is underemployed. He is technically “employed,” but his skills are not fully used.Also, the unemployment rate does not reflect job quality. A person working 10 hours a day but earning below minimum wage may be employed, but their standard of living is still poor.Finally, some informal workers are also not fully captured. In the Philippines, many people earn a living through “sidelines” like selling food or loading prepaid mobile credits. They may not be part of the formal labor force but still contribute to the economy.This is why economists look at other indicators.Underemployment rateLabor force participation rateWhile the unemployment rate is useful, it is only one part of the bigger story. To understand how Filipinos are really doing in terms of jobs, we need a more complete view of their work conditions, income, and opportunities.
The unemployment rate doesn’t always show the complete picture because it only counts people actively looking for work. It excludes those who have stopped searching (discouraged workers), people working part-time but wanting full-time jobs (underemployed), and those working in informal or unstable jobs. So, it can underestimate the true level of joblessness and job insecurity in a country.
