We’re often told that unemployment is low — maybe 3.9% if you trust the U-3 number, or 7.8% if you prefer the broader U-6. But both of these are built on a narrow and outdated definition of what “unemployment” means. If you step back and look at the full adult population, the real picture is starkly different.
To understand why the official numbers are misleading, you have to look at how they’re calculated. The most commonly cited figure, U-3 unemployment, only counts people who are actively looking for work. If you haven’t applied to a job in the last four weeks, you're no longer considered unemployed — you’re “out of the labor force.” That includes people who are discouraged, burned out, or just quietly opted out.
Then there’s U-6, the so-called “real” unemployment rate. It includes people who are marginally attached to the labor force (like those who looked for work sometime in the last year) and people working part-time but who want full-time jobs. It’s better, but still limited. U-6 doesn’t account for full-time students over 16 who aren’t working — about 13 million people, or ~4.8% of the adult population. It doesn’t include early retirees, roughly 10 million aged 50–64 who’ve left the workforce early, or ~3.7%. It doesn’t count discouraged workers who gave up on job boards years ago — another 5 million, ~1.9%.
And it certainly doesn’t count the rest of the working-age adults doing nothing and not even being asked why — at least 48 million more, or ~17.8% of the adult population are not working and the government can not track why. I believe these people are unemployed; they're just not looking, or even trying, for whatever reason. I have already subtracted students and early retirees.
Together, these people make up the real hidden unemployment, and they’re nowhere in the official headlines.
These numbers aren’t telling us how many people could work — they’re just tracking a narrow slice of economic behavior based on arbitrary definitions. It’s like measuring a flood by only counting the water inside a measuring cup.
Here’s how it breaks down:
* The U.S. population is about 347 million.
* Around 60 million of those are children under 16.
* That leaves 269 million adults in the so-called “civilian noninstitutional population” — everyone aged 16 or older who isn’t in the military or locked up.
* Of those, only about 163 million are employed.
* That means 106 million adults aren’t working in any capacity.
Now, not all of them are slackers. Some have legitimate reasons — like taking care of children. Let’s be generous and assume one full-time caretaker is needed for every two kids. With 60 million children, that’s 30 million adult caretakers.
Subtract those from the non-working adults and you're left with 76 million working-age people not working and not caring for kids either. No job. No childcare responsibility. Just... not in the labor force.
That’s 28.3% of the adult population — nearly a third — neither working nor providing direct care for the next generation.
So let’s stop pretending that unemployment is under 4%, or even under 8%. If we're honest about how many capable adults are sitting idle, the real unemployment rate in America is closer to 28%.
There's also no way the published government numbers are real. I make a job posting and receive over 100 local applications in just 24 hours. This is not what I would experience if unemployment were really as low as the government says.
That’s the number we should be talking about.