Which States Have Worst Underemployment?

But when it comes to one particular type of underemployed citizen — the part-timer who wants to work full-time — California’s the worst. In economics lingo, California has the biggest gap between its overall underemployment rate.

California ain’t having a great summer. Its economy remains crippled by the housing bust. Its unemployment rate is the nation’s third-highest, after Nevada and Rhode Island. And officials in four of its cities — Stockton, Mammoth Lakes, Compton and San Bernardino — recently filed or indicated they might file for bankruptcy protection. Well, here’s one more not-so-golden medal for the Golden State: It has the worst involuntary-part-time-worker problem.

According to new Labor Department figures, California’s average unemployment rate from July 2011 through June 2012 was 11.2% … but its broader “under-employment” rate was a whopping 20.3%. While it’s the government’s unemployment rate that moves headlines every month — the latest, for July, comes out Friday — the “under-employment” rate, or “U-6” rate, includes everyone else affected by the moribund job market: people who want to work but haven’t looked in the last four weeks because they figured no jobs were available and those working part-time gigs but would prefer full-time positions. (By the way, the government’s number-crunchers prefer “four-quarter moving averages” when it comes to state data because of it’s smaller sample size. By taking in longer time spans, the government may boost the reliability of the findings.)

Nevada, another state battered by the housing bust, is actually worse off than California when it comes to general underemployment. Its average unemployment rate is 12.3%, the government says, and its underemployment rate is 22.1% — a gap of 9.8 percentage points compared to California’s 9.1 percentage point gap. The U.S., as a whole, has a 6.8 percentage point difference between its 8.5% unemployment rate and 15.3% underemployment rate.


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