So they get the smaller percentage by dishonestly reducing the numerator of the equation.
Actually they reduce both the numerator and the denominator. But until we get to the point were the discouraged are nearly as many as the labor force they will be reducing the numerator by a much higher fraction.
%unemployed = 100 *
(number "looking for work")/((number employed) + (number "looking for work"))
If they don't count as "looking for work" those who really are actually still looking but who can no longer get unemployment benefits that decreases both numerator and denominator, but the numerator by a larger fraction, and thus the %unemployed number decreases. Even if the "number employed" increases less than the number actually looking for work does, and even if it decreases.