The two biggest differences between the U3 official rate of unemployment and the U6

The two biggest differences between the U3 official rate of unemployment and the U6 full rate of unemployment are in the treatment of the long-term unemployed and involuntary part-time workers. If you've been out of work for a long time, you badly want a job, but you know from your long search that nobody in your area is hiring; you already have applications on file at every reasonable prospect, and you haven't filled out a new application recently - then from an official perspective (U3), you are not only no longer unemployed, you just became a non-person altogether.

Alternatively, if you have a master's degree in engineering, lost your job, and are working 15 hours a week (the most you can get) in a convenience store at minimum wage to keep a little money coming in, then from an official (U3) perspective you would be fully employed. In contrast, U6 is the most inclusive measure of unemployment, as it includes both the long-term unemployed and the involuntary part-time categories. Thus, individuals in each of the situations described above would be included in the U6 measure. More...