California’s Workforce Worse off than Unemployment Numbers Indicate

Wednesday, November 20, 2013

Unemployment numbers for California are dismal, but they don’t come close to depicting the misery being inflicted on a workforce that is underemployed or too discouraged to look for work anymore.

The U.S. Bureau of Labor Statistics does six separate calculations for determining various levels of distress in the labor market, and California fares poorly in all of them. California had an official unemployment rate, which the bureau calls its U-3 measure, of 9.5% through the second quarter of this year, the second worst in the nation behind Nevada.

But when you factor in discouraged workers, people who want jobs but can’t find them, the U-4 number inches up to 10.1%. Those discouraged workers say they have not looked for a job for four weeks because they don’t believe there are any jobs to be had. Add in discouraged workers who haven’t looked for four weeks but don’t have a reason, and the U-5 number rises to 11.1%. They are known in some circles as the “hopelessly unemployed.”

The big jump comes when part-timers who want to be fulltime are counted; 18.3% of Californians, U-6, are not happy campers. That is 4 percentage points higher than the national average. The part-timers are often hired as “contractors,” don’t get employee health insurance, aren’t paid much and lack other benefits like vacations. California posted the largest gap nationally, 7.2 percentage points, between its U-5 and U-6 rates.

The sky-high unemployment and underemployment numbers come at a time of record corporate profits and peaks in stock market indices.

–Ken Broder


To Learn More:

California Has Nation's Second Highest Job Distress Rate (by Dan Walters, Sacramento Bee)

Alternative Measures of Labor Underutilization for States, Third Quarter of 2012 through Second Quarter of 2013 Averages (U.S. Department of Labor)

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