The U6 Unemployment Rate is an alternative way to calculate the unemployment rate in the United States, which is also called the real unemployment rate. It also reflects the percentage of unemployed residents of the country to the total number of the economically active population.
The main unemployment indicator U3 takes into account only people who have been actively looking for work in the last four weeks. The U6 indicator is higher as a percentage than U3, as it also covers those people who are not included in the U3 statistics and are considered indirectly related to the labor market.
The current unemployment rate and the current labor participation rate are influenced by various factors. First of all, it is the change in the demand for labor between different types of economic activity. Moreover, the fact that at the prevailing wage rates, the supply of labor exceeds the demand for labor plays a significant role in the unemployment level.
It is also possible to distinguish such factors as an increase in unemployment benefits and prolongation of the time of their payments and an increase in the share of young people in the population.
The two concepts I would like to address are the neoclassical and Keynesian theories of employment; according to the neoclassical concept that unemployment is impossible if there is an equilibrium in the labor market.
This is due to one of the above-mentioned factors: the price of labor flexibly responds to the needs of the labor market. The Keynesian concept of employment asserts that in a market economy, unemployment is not voluntary but forced. Since the statement confirms the factors discussed above, the concept is relevant when studying this topic.
Video 3: https://youtu.be/C9onjpQGpSg.