The underemployment rate is a broader measure of labor market trouble that counts not just people without jobs, but also people who have jobs that don’t fully use their skills or availability. The Bureau of Labor Statistics publishes it monthly as the “U-6” rate, and it consistently runs several percentage points higher than the standard unemployment rate you see in headlines. It’s considered by many economists to be a more honest picture of how the job market is actually treating workers.
What the U-6 Measures
The standard unemployment rate, known as U-3, only counts people who are actively looking for work and can’t find it. The underemployment rate (U-6) casts a much wider net. It includes three groups of people:
- All unemployed workers counted in the standard rate
- Marginally attached workers: people who aren’t currently working or looking for work, but who want a job, are available for one, and have searched within the past 12 months. This group includes “discouraged workers,” people who stopped looking because they believe no jobs are available for them.
- Part-time workers for economic reasons: people who want full-time work and are available for it, but have had to settle for a part-time schedule because they couldn’t find full-time positions or their hours were cut.
That last category is especially important because those workers show up as “employed” in the standard unemployment rate. A college graduate working 15 hours a week at a retail store because no one in their field is hiring counts as employed under U-3, but underemployed under U-6.
How the Rate Is Calculated
The BLS calculates the underemployment rate by adding up all three groups listed above and dividing by a slightly expanded version of the labor force. The formula looks like this:
(Total unemployed + marginally attached workers + part-time for economic reasons) ÷ (civilian labor force + marginally attached workers) × 100
The denominator is larger than the one used for U-3 because marginally attached workers aren’t technically in the civilian labor force (they aren’t working or actively searching), so they need to be added back in. Without that adjustment, the percentage would be artificially inflated.
Why It Runs Higher Than the Unemployment Rate
The U-6 rate is always higher than U-3 because it starts with everyone already counted in U-3 and then adds two more categories of struggling workers. Historically, the gap between the two measures typically runs 3 to 4 percentage points during a healthy economy. During recessions, that gap can widen considerably as more workers get their hours slashed or give up searching altogether.
This gap is what makes the underemployment rate useful. When the standard unemployment rate drops, it could mean people are finding good jobs, or it could mean discouraged workers stopped looking and fell out of the count entirely. The U-6 captures those people. If U-3 is falling but U-6 stays stubbornly high, it signals that the job market isn’t as strong as the headline number suggests.
What the Rate Doesn’t Capture
Even the U-6 has blind spots. It doesn’t measure “skills mismatch” underemployment, the situation where someone with a degree or specialized training works a full-time job that doesn’t require their qualifications. An engineer working 40 hours a week as a barista is fully employed by every BLS measure, but most people would consider that underemployment in a practical sense.
It also doesn’t capture workers who are technically full-time but earning far below what their experience or education would normally command. Someone working 40 hours a week at minimum wage after being laid off from a well-paying position isn’t flagged in any BLS underutilization measure. Researchers and think tanks sometimes publish their own estimates of this type of underemployment, but there’s no single official number for it.
How Education Affects the Picture
Labor market outcomes vary significantly by education level. As of early 2025, the unemployment rate for workers without a high school diploma was 6.6%, compared to 4.4% for high school graduates and 3.6% for those with some college or an associate degree. Workers with a bachelor’s degree or higher typically have the lowest rates.
These patterns hold for underemployment as well, though the BLS doesn’t publish U-6 broken out by education level in its main monthly tables. Workers with less education are more likely to face involuntary part-time schedules and more likely to drop out of the labor force when opportunities dry up, both of which push up the broader underutilization rate for that group.
Where to Find the Current Rate
The BLS publishes all six measures of labor underutilization (U-1 through U-6) in Table A-15 of its monthly Employment Situation report, released on the first Friday of each month. You can find it at bls.gov under “News Releases” or by searching for “Table A-15.” The data is seasonally adjusted, so month-to-month comparisons are straightforward.
When you see economists or news outlets refer to the “real unemployment rate,” they’re almost always talking about U-6. It’s the broadest official measure of how many Americans are struggling in the labor market, and tracking it alongside the standard unemployment rate gives you a much clearer view of whether the economy is actually working for people looking for jobs.