The U.S. job market is in a period of unprecedented growth. The number of working Americans has increased for 105 consecutive months — a record streak. This coincides with an even longer period of economic expansion, stretching back over a decade. As a result, the unemployment rate has declined from a high of 10.0% in October 2009 to 3.7% in June 2019.
The unemployment rate, however, is not the only factor worth considering when analyzing the overall economic and labor market strength of the United States. Moreover, it can sometimes be misleading. For example, some workers have been unemployed for so long that they stopped looking for work and are not factored into the unemployment rate. Similarly, some people want full-time work but can only find part-time work. The underemployment rate accounts for these Americans and provides a perhaps more comprehensive picture of the labor market.
Typically, people with higher levels of education have a better chance of finding work as they become more qualified for a wider range of positions with a college degree. Indeed, the unemployment rate among graduates of certain areas of study is less than half the overall unemployment rate. These are the college majors with the lowest unemployment rates.
But not all college grads work in a job that complements their skills as some have to take lower-paying, part-time jobs to make ends meet. People in this position often take on jobs in the so-called “gig economy,” like driving for ride-sharing services. This is a common phenomenon across the country, but it is more common in some places than others.
24/7 Wall St. reviewed data from the Bureau of Labor Statistics to determine the states with the highest underemployment rate. We used the underemployment rate as a proxy to how hard it is to find full-time work.
When measuring the overall health of an economy, both the unemployment rate and the underemployment rate are critical measures. The states with the highest underemployment rates also tend to have high unemployment rates — indicative of weaker economic conditions. These are the states with the best and worst economies.