States Where It Is Hardest to Find Full-Time Work

August 6, 2013 by 247alex

As the nation continues to recover from the recession, not only is the unemployment rate down, but the underemployment rate — an important measure of the health of the job market — has been slowly declining as well.

In 2012, 14.7% of all people in the workforce either had no job, were too discouraged to go looking, or were not working as much as they wanted. Through the 12 months ending mid-2013, this figure had fallen slightly to 14.3%. But in many states, underemployment remains persistently high. These are the states where it is hardest to find full-time work.

Click here to see where it is hardest to find a full-time job

BLS chief regional economist Martin Kohli told 24/7 Wall St. “In these states, the statistics are showing some positive and some negative developments.” In high underemployment states like Mississippi and New Jersey, he noted, the rate of people involuntarily underemployed increased over the last year, even as the national rate declined.

For those high underemployment states where the rate has declined, however, such as California, Nevada, and Michigan, the declines in underemployment rates in some of these states is a sign of job market growth. In these states, Kohli noted, there have been “increases in their labor forces, as well as significant over the year increases in payroll jobs, so the changes in the [underemployment] rates are additional confirmation of improvements in their labor markets.”

For many states with high underemployment, a strong year for job growth in 2012 still has not been enough to help all workers find jobs. High underemployment states like Washington, Arizona, and California had some of the fastest job growth in the country in 2012, but still have not recovered all of the jobs they lost prior to the recession. In Arizona, there were about 2.5 million jobs in July. In late 2007, there were nearly 2.7 million nonfarm jobs. In California, where the number of jobs rose 3.3% in 2012, the third-fastest growth in the country, there were 14.6 million jobs in July, just under half a million less than in late 2007.

Many of the states where people cannot find full-time, consistent work were especially hurt by the housing market collapse in the previous decade. At the end of 2012, according to the CoreLogic Case-Shiller Indexes, home prices in the majority of the states with high underemployment were still at least 20% lower than they were at the end of 2007. In Arizona and Nevada — both high underemployment states — home prices declined by one-third and almost half, respectively.

To determine the states with the least full-time work, 24/7 Wall St. used figures published by the Bureau of Labor Statistics’ Alternative Measures of Labor Underutilization, covering four quarters ending with the second quarter of 2013. We focused on two measures: U-3, the conventional measure of the unemployment rate, and U-6, the underemployment rate. The underemployment rate adds “marginally attached” workers, which includes those who have become too discouraged to look for a job, and people working part time because their hours were cut or they cannot find full-time work. We also reviewed figures published by the Bureau of Economic Analysis on personal income and changes by state for 2012.

These are the states where it is hardest to find full-time work.

10. New Jersey
> Underemployment rate: 15.7% (tied-8th highest)
> Unemployment rate: 9.1% (tied-6th highest)
> Gross domestic product: 1.3% (15th lowest)
> Income per capita: $53,628 (3rd highest)

New Jersey has suffered from the recession, as well as the aftermath of Superstorm Sandy. Home prices are down by 21% between 2007 and the end of 2012, a decline topped by only nine states. Average weekly wages in the state are among the highest in the country, at $1,172. However, wage growth was slow in 2012. The state has also had a slow job recovery, and the 12-month average unemployment rate midway through this year remained above 9%.

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9. Arizona
> Underemployment rate: 15.7% (tied-8th highest)
> Unemployment rate: 8.1% (tied-15th highest)
> Gross domestic product: 2.6% (13th highest)
> Income per capita: $35,979 (10th lowest)

Like neighboring Nevada, Arizona’s housing market was hit hard by the recession. Home prices were down 33.3% between the end of 2007 and the end of last year. However, there are some signs of a healthy recovery — Arizona’s home prices rose the most in the U.S. last year. But the housing market still has a long way to go. More than a third of homes with mortgages have negative equity, higher than all but three other states. The state’s job market has been slow to recover. Unemployment is down from a 12-month average of 8.2% of the labor force to 8.1% through the first half of 2013. Construction jobs are up by nearly 10% between June 2012 and June 2013, but are still down by close to 50% compared to June 2006.

8. Washington
> Underemployment rate: 15.7% (tied-8th highest)
> Unemployment rate: 7.5% (tied-22nd highest)
> Gross domestic product: 3.6% (4th highest)
> Income per capita: $45,413 (12th highest)

Washington has improved its unemployment measurably in the last two quarters, from a 12-month average of 8.3% at the end of 2012, to an average of 7.5% at the end of the second quarter of 2013 — below the U.S. 12-month rate of 7.8%. The state’s underemployment rate has also fallen more than all but three other states, but the rate remains one of the highest in the country. One barrier to higher full-time employment may be the state’s minimum wage, although policy makers disagree on the effect such minimums have on job growth. Washington has the nation’s highest minimum wage, at $9.19 per hour.

7. Mississippi
> Underemployment rate: 15.8%
> Unemployment rate: 9.3% (4th highest)
> Gross domestic product: 2.4% (17th highest)
> Income per capita: $33,073 (the lowest)

In the wake of the recession the economic prospects in this state are still grim, especially when business earnings decline and jobs are cut as a result. Last month, for example, Entergy Corporation, which employs 1,900 Mississippi workers, said it will cut 800 jobs to make up for plummeting net income. In 2012, jobs grew by just 1.1% in the state, below the U.S. growth rate of 1.9%. Wages also grew less than average. As of the end of 2012, workers in the state earn just $720 per week, less than those in any other state.

6. Rhode Island
> Underemployment rate: 15.9%
> Unemployment rate: 9.5% (tied-3rd highest)
> Gross domestic product: 1.4% (17th lowest)
> Income per capita: $44,990 (14th highest)

The Rhode Island economy was among the weakest in the nation during 2012, when it had far-slower growth in both employment and wages than the U.S. overall, and home prices barely inched upwards. According to the Associated Press, Rhode Island recently received a $1.9 million federal grant to help boost its economy and infrastructure. The first half of this year has been more promising, however. Rhode Island’s annual average unemployment rate was 10.5% in 2012, higher than any other state except Nevada. But by the second quarter of 2013, the state’s 12-month average unemployment rate had fallen substantially to 9.5%. Similarly, the state’s underemployment rate also declined in that time, from 17.6% to 15.9%, a larger percentage point decline than any other state.

5. Illinois
> Underemployment rate: 16.1% (tied-4th highest)
> Unemployment rate: 9.0% (7th highest)
> Gross domestic product: 1.9% (25th lowest)
> Income per capita: $44,815 (16th highest)

Illinois’ housing market reveals the poor state of economic health in the state: over a quarter of homes with mortgages have negative equity. Between 2007 and 2012, home prices saw a 28.6% decline, worse than only three other states. Jobs in Illinois are faring no better. The unemployment rate is one of the highest in the country. Employment growth was also slower than two thirds of states in 2012. This month, the Chicago Tribune reported filings with the Illinois Department of Commerce and Economic Opportunity, which said about 400 workers were told in July they might be laid off.

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4. Michigan
> Underemployment rate: 16.1% (tied-4th highest)
> Unemployment rate: 8.9% (8th highest)
> Gross domestic product: 2.3% (18th highest)
> Income per capita: $37,497 (16th lowest)

Like many states with high underemployment, Michigan home prices fell significantly during the recession, but showed some signs of improvement in 2012. Average weekly wages grew by only 2.3% in 2012, the fifth-slowest growth among states. Reflecting the desperate state of employment in the state, the Michigan Economic Development Corporation announced last month its approval of incentives to companies planning expansions in Michigan. CBS reports the projects may generate nearly $86 million in investments, and add 600 new jobs.

3. Oregon
> Underemployment rate: 16.9%
> Unemployment rate: 8.7% (10th highest)
> Gross domestic product: 4.0% (3rd highest)
> Income per capita: $38,786 (18th lowest)

According to the Bureau of Labor Statistics, Oregon’s 12-month average unemployment rate of 8.7 was the 10th-worst in the country. It’s underemployment rate was even worse, with 16.9% of workers either unemployed or involuntarily employed less than full-time. While jobs grew more than most states in 2012, the state is still short by roughly 70,000 jobs compared to its pre-recession levels. Average weekly wage in Oregon is not far below the national average. However wage growth has been slower than most of the country, growing just 2.5% in 2012.

2. California
> Underemployment rate: 18.3%
> Unemployment rate: 9.5% (tied-3rd highest)
> Gross domestic product: 3.5% (6th highest)
> Income per capita: $44,980 (15th highest)

California was one of the fastest growing states in the nation in 2012. Jobs grew by 3.3% last year, more than all but two other states. Home prices began to rebound as well, rising by 12.9% from the fourth quarter of 2011 to the fourth quarter of 2012, more than all but two other states. But over the 12 months ending with the second quarter of 2013, the state had among the highest unemployment and underemployment rates in the country. Also, while the state has done well in adding jobs so far through 2013, it still has yet to replace about half a million jobs lost during the recession.

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1. Nevada
> Underemployment rate: 19.0%
> Unemployment rate: 10.4% (the highest)
> Gross domestic product: 1.5% (20th lowest)
> Income per capita: $37,361 (14th lowest)

Home prices in Nevada fell by 46.6% between 2007 and 2012, the worst decline in the nation, according to CoreLogic. In 2012, employment in Nevada saw a 1.9% growth, which was 14th in the country. Jobs have been created in Nevada in some of the largest industries, particularly leisure and hospitality, which reported a 2.3% increase this June, according to Nevada’s Research and Analysis Bureau. But the state is still down more than 100,000 jobs compared to pre-recession levels. Some are skeptical of the job growth in the state, noting that while jobs are being created, over half are for low-wage positions. Wage growth in 2012 was 16th lowest in the country.