Discouraged Workers in 2025: Key Insights and Current U.S. Figures

What Is a Discouraged Worker?

A discouraged worker is an individual who is eligible and capable of working but has ceased actively searching for employment because they believe no suitable jobs are available. These workers have not sought work in the past four weeks despite wanting employment.

Key Highlights

• Discouraged workers stop job hunting due to lack of suitable opportunities or repeated rejections.
• The reasons behind worker discouragement are multifaceted and complex.
• They are excluded from the official unemployment rate but included in broader labor underutilization measures like U-4, U-5, and U-6.
• The U-4 rate combines unemployed individuals and discouraged workers relative to the total labor force.
• Policymakers utilize these metrics to design programs aimed at reintegrating discouraged workers into the workforce.

Understanding the Concept According to the BLS

The U.S. Bureau of Labor Statistics (BLS) defines discouraged workers as those not actively in the labor force who want and are available for work but have not searched for a job in the last four weeks due to the belief that no jobs are available or for which they qualify.

Since discouraged workers are not actively seeking employment, they are not counted in the headline unemployment rate, potentially understating the true level of labor underutilization.

Why Do Workers Become Discouraged?

Worker discouragement arises from various factors, including technological shifts that render skills obsolete. For example, during the Great Recession, many senior manufacturing workers lost jobs as they could not adapt to new CNC machinery.

Experts like Nick Eberstadt attribute this trend partly to a shortage of skilled, willing workers and increased reliance on disability insurance, supported by research indicating higher disability claims among discouraged workers.

Additional causes include employment barriers faced by formerly incarcerated individuals and gender-based job accessibility perceptions.

Current Statistics

As of June 2024, the U.S. had approximately 369,000 discouraged workers, reflecting ongoing challenges in the labor market.

How the BLS Accounts for Discouraged Workers

The BLS uses alternative unemployment measures—U-4, U-5, and U-6—to capture broader labor underutilization, including discouraged workers:

• U-4: Unemployed plus discouraged workers.
• U-5: Unemployed, discouraged, and other marginally attached workers.
• U-6: Includes U-5 plus part-time workers seeking full-time employment.

Between Q2 2023 and Q1 2024, the seasonally adjusted U-4 rate stood at 3.9%, slightly above the official unemployment rate of 3.7%, but significantly lower than the 9.7% recorded during the 2009 recession peak.

Strategies to Support Discouraged Workers

Tracking the U-4 rate enables policymakers to monitor discouraged worker trends and tailor interventions. Such efforts may include targeted training, education funding, and incentives for employers to hire long-term unemployed individuals.

Summary

Discouraged workers are able and willing to work but have stopped job searching due to perceived lack of opportunities. This group is excluded from official unemployment statistics, which can obscure the true employment landscape. Understanding and addressing the needs of discouraged workers is essential for a comprehensive view of labor market health and effective policy development.

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