What is underemployment?

April jobs data from the Bureau of Labor Statistics comes out in just one week. It’ll be a peek into how the labor market of late is playing out for employers, employees, and job seekers.

The headline unemployment rate comes out of that report. But what about people who are working, but not enough to get by?

Nobody at the BLS is asking workers straight up whether they’re underemployed. But, as Lonnie Golden, an economist at Penn State, pointed out, the Bureau does ask part-time workers, “whether they were working part time because they … had been looking for full-time jobs, but couldn't find full-time jobs … or if they had their hours reduced below 35 hours.”

Golden said tracking these “part-time for economic reasons” workers can be a useful leading indicator of future unemployment or job reductions. But these roughly 4.5 million people don’t show up in the usual unemployment numbers because, well, they are technically employed.

Instead they show up in a category called U-6. This category also includes the unemployed and what’s called people marginally attached to the labor force.

“People that have stopped looking for work, but have looked for work in the past and want a job and are ready to work,” said Guy Berger, director of economic research at the Burning Glass Institute.

He said for the past few months, U-6 has hovered around 8%. But, like the overall unemployment rate, it has generally ticked up over the last few years.

“If you're somebody who's been unfortunate enough to either be entering labor for the first time because you finished school or because you're one of the … people that has been laid off, it’s extremely tough,” Berger said.

And that’s the low-hire part of the low-hire, low-fire labor market.