Detailed Findings and Methodology:
Labor underutilization in the United States has largely improved over the past year. The underemployment rate fell in 40 states, and the national underemployment rate fell from 10.1% one year ago to 9.5% today. In the states where labor underutilization increased over the past year, the change usually coincided with sluggish economic conditions. The three states where underemployment increased the most in 2016 — Wyoming, Alaska, and North Dakota — had the largest GDP declines in the country.
All of the states with declining GDPs and rising underemployment disproportionately depend on oil. The price of crude oil fell by more than two-thirds from May 2014 through the beginning of 2016, hurting the economies of many major oil-producing states throughout the South and Midwest. While the oil industry had previously provided high-paying jobs to relatively unskilled workers, many of those who lost their industry jobs may have trouble finding employment in other sectors. In 7 of the 10 states where a relatively large share of the workforce is employed in the mining and logging sector, GDP declined substantially over the past year, and 6 of the 10 had increases in underemployment.
States where labor underutilization is improving, however, tended to have rapid economic and population growth. In recent years, waves of Americans have been migrating from the Northeast to states in the West and Southeast, where job availability is high and cost of living is low. The influx of new residents in states such as Oregon, Arizona, Georgia, and North Carolina has stimulated regional economic growth, which in turn helped decrease underemployment.
As is the case with traditional unemployment, state educational attainment appears to have an effect on underemployment. A member of the labor force with a college education is more likely to find full-time employment, and a state with a large share of college-educated adults is more likely to attract new businesses that provide and create additional job opportunities.
To determine the states where it is hardest (and easiest) to find full-time work, 24/7 Wall St. examined average underemployment rates for the 12 months through the first quarter of this year as measured by the BLS. The underemployment rate is the total number of unemployed job seekers, discouraged and other marginally attached workers, and people settling for part-time jobs as a share of the labor force. We also considered the official unemployment rate as of June 2017. Also from the BLS, we reviewed average annual wages, employment, and the size of the labor force from 2015 through 2016. Socioeconomic indicators, including poverty and educational attainment rates came from the U.S. Census Bureau’s 2015 American Community Survey. GDP growth and contribution to GDP growth by industry came from the Bureau of Economic Analysis and is for the period 2015 to 2016.