Discouraged Worker

Definition

The term discouraged worker refers to an individual that is unemployed and not actively seeking new employment.  A discouraged worker is available to work, is physically able to work, has looked for a job in the past, but is no longer seeking employment because they do not believe it is possible to find a job.

Explanation

Discouraged workers are individuals that would like to be employed, but have stopped looking for a job.  They are physically able to work, have actively looked for employment in the past twelve months, but are under the belief they will not be able to find a job.  Discouragement typically occurs for one or more of the following reasons:

  • The individual believes there are no jobs.
  • The individual believes they lack the education or training necessary to obtain a job.
  • The individual believes they are the target of discrimination, usually based on gender, age, or race.
  • The individual was not able to find a job.

From a statistical standpoint, discouraged workers are not considered unemployed because they are not actively looking for employment.  This segment of society makes up a portion of what is known as "hidden unemployment," because they are not counted when the U.S. Bureau of Labor Statistics publishes their unemployment data.  Adding discouraged workers to those reported as unemployed is thought to be a more accurate measure of unemployment.

Even the number of discouraged workers is believed to be higher than typically reported.  The metric does not include those individuals that have looked for, or held, a job in more than twelve months, including the homeless.

Related Terms

dislocated worker, employment gaps, degree inflation, employee engagement, wrongful demotion