# Discouraged Worker: Definition, Causes, vs. Unemployed

![Frustrated Young Man With Laptop Sitting on the Floor](https://www.investopedia.com/thmb/rYEnrWU0ccYW8miPtN2JcDLhhvg=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/GettyImages-1035011788-628ab26e1db24349af733475d0468765.jpg)

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> **Definition**
>
> A discouraged worker is an individual who is eligible and able to work but has stopped actively seeking employment due to a belief that no suitable job opportunities are available.

## What Is a Discouraged Worker?

A discouraged worker is a person who is eligible for employment and can work, but who is currently unemployed and has not attempted to find employment in the last four weeks. Discouraged workers usually have given up on searching for a job because they found no suitable employment options or failed to secure a job when they applied.

### Key Takeaways

*   Discouraged workers are workers who have stopped looking for work because they found no suitable employment options or failed to be shortlisted when applying for a job.
*   The causes for worker discouragement are complex and varied.
*   Discouraged workers are not included in the headline unemployment number. Instead, they are included in the U-4, U-5, and U-6 unemployment measures.
*   The U-4 rate is calculated by dividing the sum of unemployed and discouraged workers by the total labor force, including discouraged workers.
*   Policymakers use underutilization of labor rates, such as U-4, to create plans that help discouraged workers get back to work and incentivize companies for hiring them.

## Understanding Discouraged Workers

The U.S. Department of Labor’s [Bureau of Labor Statistics (BLS)](https://www.investopedia.com/terms/b/bls.asp) defines discouraged workers as “those persons not in the labor force who want and are available for work, and who have looked for a job sometime in the prior 12 months, but were not counted as unemployed because they had not searched for work in the four weeks preceding the survey.” The BLS adds that “discouraged workers were not currently looking for work specifically because they believed no jobs were available for them or there were none for which they would qualify.”

As discouraged workers are no longer looking for employment, they are not counted as active in the labor force. This means that the headline [unemployment rate](https://www.investopedia.com/terms/u/unemploymentrate.asp), which is based solely on the active labor force number, [does not take into account the number of discouraged workers](https://www.investopedia.com/articles/economics/10/unemployment-rate-get-real.asp) in the country.

### Causes for Worker Discouragement

The causes for worker discouragement are complex and varied. In some cases, workers fall out of the workforce because they are not equipped to deal with technological change in their workplace. An example of this occurred during the [Great Recession](https://www.investopedia.com/terms/g/great-recession.asp), when the manufacturing sector shed senior staff unable to work on the new computer numeric control (CNC) machines, used for cutting wood and other hard materials, according to a report by _The Washington Post_.

Nick Eberstadt of the American Enterprise Institute (AEI) has blamed the “flight from work” on a lack of supply of skilled, able, and willing workers and an increasing reliance on [disability insurance](https://www.investopedia.com/terms/d/disability-insurance.asp). His theory is backed by Alan Krueger’s 2016 research, which found that self-reported pain and disability insurance was higher among discouraged workers.

Other possible reasons for discouraged workers include restrictions that limit employment options for formerly incarcerated individuals and jobs that are perceived as being inaccessible to a specific gender.

### 369,000

The number of discouraged workers in the U.S. in June 2024, according to the Bureau of Labor Statistics (BLS).

## BLS Accounting for Discouraged Workers

To better analyze unemployment in the U.S., the BLS created [alternative measures for the underutilization of labor](https://www.investopedia.com/articles/investing/080415/true-unemployment-rate-u6-vs-u3.asp). U-4, U-5, and U-6 capture discouraged workers.

*   U-4 equals the total number of unemployed people, plus discouraged workers.
*   U-5 equals the total number of unemployed people, discouraged workers, and other marginally attached workers.
*   U-6 equals the total number of unemployed people, all marginally attached workers, plus people employed part-time who are seeking full-time employment.

From the second quarter of 2023 through the first quarter of 2024, the U-4 rate, seasonally adjusted, was 3.9%, just a shade higher than the headline, or official, unemployment rate of 3.7%.

In spite of the pandemic's impact on the economy, the current U-4 number is not as bad as the 2009 annual average, which stood at 9.7% in the throes of the Great Recession.

## Helping the Discouraged

The U-4 rate helps to quantify how many discouraged workers exist and keep tabs on the change in their numbers. Further analysis of age groups, race, and geographic location is also made possible by U-4 measures.

Policymakers at federal, state, and local levels can use these numbers to formulate plans to assist them. Such plans may consist of training programs, education [subsidies](https://www.investopedia.com/terms/s/subsidy.asp), or [tax credits](https://www.investopedia.com/terms/t/taxcredit.asp) for companies that hire long-term unemployed individuals.

## What Are Discouraged Workers?

Discouraged workers are people who are eligible and able but not actively seeking work. Specifically, these workers have not tried to become gainfully employed in the last four weeks and have given up on searching for work typically because nothing is suitable.

## How Many Discouraged Workers Are in the U.S.?

In June 2024, there were 369,000 discouraged workers in the U.S. This was a significant decrease from June 2023, when there were 320,000 discouraged workers.

## Why Are Discouraged Workers Not Counted As Unemployed?

An unemployed person is defined as someone who is able and eligible to work and has been actively looking for work in the last four weeks. Discouraged workers are able and eligible but not currently looking for work. More specifically, discouraged workers have not actively looked for work in the last four weeks; therefore, they are not counted as unemployed.

## The Bottom Line

Discouraged workers are those who are not employed or actively looking for work. In the United States, these workers are considered to have left the labor force. Because they are not counted in the official unemployment figure this omission can lead to misunderstandings of the actual employment situation.

> **Article Sources**
>
> 1.  U.S. Bureau of Labor Statistics. "[Labor Force Characteristics (CPS): Discouraged Workers](https://www.bls.gov/cps/lfcharacteristics.htm#discouraged)."
>     
> 2.  U.S. Bureau of Labor Statistics. "[How the Government Measures Unemployment](https://www.bls.gov/cps/cps_htgm.htm#concepts)." Select "What are the basic concepts of employment and unemployment?"
>     
> 3.  U.S. Bureau of Labor Statistics. "[How the Government Measures Unemployment](https://www.bls.gov/cps/cps_htgm.htm#nilf)." Select "Who is not in the labor force?"
>     
> 4.  The Washington Post. "[U.S. Manufacturing Sees Shortage of Skilled Factory Workers](https://www.washingtonpost.com/business/economy/us-manufacturing-sees-shortage-of-skilled-factory-workers/2012/02/17/gIQAo0MLOR_story.html)."
>     
> 5.  TIME. "[America’s Unseen Social Crisis: Men Without Work](https://time.com/4504004/men-without-work/)."
>     
> 6.  Krueger, Alan B. "[Where Have All the Workers Gone? An Inquiry Into the Decline of the U.S. Labor Force Participation Rate](https://www.brookings.edu/wp-content/uploads/2018/02/kruegertextfa17bpea.pdf)." _Brookings Papers on Economic Activity_, Fall 2017, pp. 1-87.
>     
> 7.  Prison Policy Initiative. "[New Data on Formerly Incarcerated People’s Employment Reveal Labor Market Injustices](https://www.prisonpolicy.org/blog/2022/02/08/employment/)."
>     
> 8.  International Labour Organization. "[The Gender Gap in Employment: What’s Holding Women Back?](https://webapps.ilo.org/infostories/en-GB/Stories/Employment/barriers-women)"
>     
> 9.  U.S. Bureau of Labor Statistics. "[Table A-16. Persons Not in the Labor Force and Multiple Jobholders by Sex, Not Seasonally Adjusted](https://www.bls.gov/news.release/empsit.t16.htm)."
>     
> 10.  U.S. Bureau of Labor Statistics. "[Concepts and Definitions (CPS): Alternative Measures of Labor Underutilization (U-1 through U-6)](https://www.bls.gov/cps/definitions.htm#altmeasures)."
>      
> 11.  U.S. Bureau of Labor Statistics. "[Alternative Measures of Labor Underutilization for States, Second Quarter of 2023 through First Quarter of 2024 Averages](https://www.bls.gov/lau/stalt.htm)."
>      
> 12.  U.S. Bureau of Labor Statistics. "[Alternative Measures of Labor Underutilization for States, 2009](https://www.bls.gov/lau/stalt09q4.htm)."