Discouraged worker

A discouraged worker is someone who is able and available to work but has stopped actively looking for a job because they believe no suitable opportunities exist. Because they have not searched for work in the four weeks prior to a labor-force survey, discouraged workers are not counted as unemployed in the official headline unemployment rate.

Key points

• Discouraged workers want work but are not actively searching, so they are considered outside the labor force.
• They are excluded from the official unemployment rate but included in broader underutilization measures (U-4, U-5, U-6).
• Causes are varied and include skill mismatches, health or disability issues, barriers faced by formerly incarcerated people, and perceptions of job inaccessibility.
• Policymakers use alternative measures and targeted programs (training, subsidies, tax incentives) to help re‑engage discouraged workers.

Definition and measurement

The Bureau of Labor Statistics (BLS) classifies discouraged workers as persons not in the labor force who:
* Want and are available for work,
* Looked for a job at some time in the prior 12 months, but
* Did not search in the four weeks preceding the survey specifically because they believed no jobs were available for them or that they would not qualify.

Because discouraged workers are not actively searching, they are excluded from the active labor force used to compute the headline unemployment rate.

How the BLS includes discouraged workers in broader measures

To capture labor underutilization more fully, the BLS publishes alternative measures:
* U-4: Unemployed + discouraged workers.
* U-5: U-4 + other marginally attached workers.
* U-6: U-5 + people working part-time for economic reasons (who want full-time work).

For example, from Q2 2023 through Q1 2024 the seasonally adjusted U-4 rate was 3.9%, compared with the official unemployment rate of 3.7%. By contrast, U-4 averaged much higher during severe downturns (2009 annual U-4 averaged about 9.7%).

Common causes of discouragement

Discouragement can arise from multiple sources:
* Skill mismatches and technological change (workers displaced by new technologies or equipment).
* Health problems and rising disability claims tied to self-reported pain or functional limitations.
* Structural and legal barriers (for example, employment restrictions faced by formerly incarcerated people).
* Gender- or sector-specific barriers that make certain jobs feel inaccessible.
* Repeated job search failures leading to loss of confidence.

Policy responses

Policymakers and employers can address discouragement through:
* Job training, reskilling, and education subsidies.
* Targeted hiring incentives or tax credits for employers who hire long-term unemployed workers.
* Programs to reduce legal and administrative barriers for re-entering the workforce.
* Outreach and placement services that connect marginally attached workers with opportunities.

Quick facts

• In June 2024 there were 369,000 discouraged workers in the U.S. (up from 320,000 in June 2023).
• Discouraged workers are counted in U-4, U-5, and U-6 measures but not in the official unemployment rate.

Bottom line

Discouraged workers represent people who want work but have left active job searching because they see no viable opportunities. Excluding them from the official unemployment rate can understate labor-market slack; alternative BLS measures and targeted policies help reveal and address this hidden underutilization.