Every month, the U.S. Department of Labor announces the official unemployment figures. On Friday, it reported that the unemployment rate rose from 8.2% to 8.3%, and immediately the news captured the headlines. Politicians from both major U.S. parties began spinning the figures for their own political gain.
While the unemployment rate is the statistic most talked about in the media, it does not give a full picture of the employment situation in this country. In order to be unemployed, one must be out of work and have actively searched for a job within the past four weeks. Some people who have not been able to find jobs have dropped out of the labor force altogether. Others are considered “marginally attached” to the labor force, meaning they have looked for a job within the past year, but not actively in the past four weeks.
Finally, there are many people who are working part-time but would prefer full-time work. All of the people in these situations are part of a state’s underemployment rate. The underemployment rate in this country from the third quarter of 2011 to the second quarter of 2012 is 15.3%.
24/7 Wall St. looked at the 10 states with the highest underemployment rate. Not surprisingly, the official unemployment and underemployment rates are highly related. Four of the top five states on the list are in the top five in terms of unemployment.
The underemployment rate is also generally tied to a state’s housing market. Five of the states on this list made 24/7 Wall St.’s recent report on the 10 states with the most underwater mortgages.
Finally, income growth per capita has not been as strong in states with the highest underemployment. Three of the 10 states on the list were in the bottom 10 states for income per capita growth, with another three ranking in the bottom 20.
When reviewing the states with highest underemployment, we considered data from the Bureau of Labor Statistics on unemployment and underemployment, as a moving average between Q3 2011 and Q2 2012, a moving average between Q2 2011 and Q1 2012, and a moving average in all of 2011. 24/7 Wall St. also looked at Bureau of Labor Statistics data on income per capita and the gross domestic product. To gauge how the housing market affects the labor force, we looked at data from CoreLogic on the percentage of houses underwater and data from Fiserv for housing price drops. We also looked at the poverty rates and percentage of people on Medicaid as of June 2012, which was provided by U.S. Census Bureau.
Here are the 10 states with the highest underemployment.