>Underemployment rate: 17.4%
>Official unemployment rate: 9.4% (9th highest)
>Gross domestic product: $337.4 billion (13th highest)
>Income per capita: $36,533 (14th lowest)
When the U.S. automobile industry was on the brink of collapse several years ago, Michigan’s economy went into a downward spiral. Until June 2010, Michigan had the highest unemployment in the country, reaching 15.2% in the summer of 2009. While the situation has greatly improved since hitting rock bottom three years ago, the unemployment rate is still 1.2 percentage points above the national average. However, the underemployment situation has also shown improvement recently. Last quarter, 18.1% of people were considered underemployed, which was the fourth highest at the time. The drop of 0.7 percentage points is the biggest drop in underemployment of any state on this list.
4. North Carolina
>Underemployment rate: 17.5%
>Official unemployment rate: 9.8% (5th highest)
>Gross domestic product: $385.1 billion (9th highest)
>Income per capita: $36,164 (13th lowest)
North Carolina’s income per capita between 2010 and 2011 has grown at a rate of 3.31%, the lowest of any state on this list and the third lowest overall. Like its southern companion, North Carolina’s housing market has not been as battered as other states on this list. Housing prices between the end of 2006 and 2011 tumbled only 9.6%, lower than any state on this list other than South Carolina. Meanwhile, only 14.7% of mortgages are underwater in the state, less than any other state on this list. The poverty rate for North Carolina is 17.5%, the highest on the list except for its southern neighbor.
3. Rhode Island
>Underemployment rate: 18.9%
>Official unemployment rate: 11.2% (2nd highest)
>Gross domestic product: $43.7 billion (6th lowest)
>Income per capita: $43,992 (16th highest)
Unlike neighboring states Massachusetts and Connecticut, which have underemployment rates of 13.5% and 14.5%, respectively, Rhode Island has an underemployment rate of 18.9%. The state’s heavy reliance on tourism is often considered a factor. The state has the second-highest percentage of people in the labor force who have been out of a job for more than 15 weeks, at 7%. Rhode Island is the only state where the underemployment rate for the end 2011, at 18.6%, was actually lower than the current moving average.
>Underemployment rate: 20.3%
>Official unemployment rate: 11.2% (3rd highest)
>Gross domestic product: $1,735.4 billion (highest)
>Income per capita: $44,481 (12th highest)
California is one of only two states where more than a fifth of the labor force is underemployed. The state has the highest difference between the U6 and U5 percentage rates, indicating there are a higher percentage of people involuntarily working part-time than in any other state in the U.S. California has the sixth-highest percentage of homes underwater for all states, at 30.5%, and the 46.7% change in home prices between the end of 2006 and 2011 is the fourth-largest drop. Higher incomes could help boost consumer spending in the future, perhaps helping to bring down the underemployment rate. Income per capita for the state is $44,481, the highest of all of the states on this list.
>Underemployment rate: 22.1%
>Official unemployment rate: 12.3% (highest)
>Gross domestic product: $112.5 billion (19th lowest)
>Income per capita: $38,173 (21st lowest)
Nevada’s highest-in-the-country unemployment rate does not provide an accurate portrayal of the job situation, as the underemployment rate is almost 10 percentage points higher than the official rate. The housing market has pummeled Nevada’s economy. Between the end of 2006 and end of 2011, housing values tumbled 59.9%, the sharpest decline of all 50 states. Now a whopping 61.2% of houses are underwater, the highest in the U.S. by more than 16 percentage points. As housing prices tanked, underemployment grew. The rate of job losers and people who have completed temporary jobs is 7.7%, higher than any state measured. Even as underemployment is falling, incomes are not rising particularly fast. Income per capita rose only 3.34% from 2010 to 2011, the second-lowest rate on this list, after North Carolina, and the fourth lowest overall.