Cross-posted on Prosperity Watch
The big labor market news in North Carolina last month was the increase in the state’s unemployment rate to a 15-month high of 10.5%. As devastating as it is for more than one in ten North Carolina job seekers to be out of work, even this statistic masks the true depth of the jobs crisis in the state.
In addition to the monthly unemployment rate, the US Bureau of Labor Statistics also publishes a broader measure of un- and under-employment that provides a fuller representation of the plight of workers. This measure (published as the “U-6 measure of labor underutilization”) includes not only individuals actively seeking work but also includes involuntary part-time workers and individuals classified as “marginally attached” to the labor force (i.e. individuals having sought work in the past twelve months but not in the past four weeks ).
This U-6 measure, illustrated in green in the chart below, shows that nearly one in five workers in North Carolina want, but have been unable to secure, full-time employment. Prior to the recession, only one in twelve North Carolina workers had been unable to secure full-time employment.
The rise in underemployment since 2007 has been even more dramatic than the increase in the traditional unemployment rate (the U-3 measure). Back in 2007, the gap between the unemployment rate and the underemployment rate was only 4.0 percentage points. As of the most recent data release, that gap had risen to 7.4 percentage points.
North Carolina’s persistently high underemployment rate demonstrates that the jobs gap of nearly 500,000 jobs actually underestimates what is needed to satisfy the demands of the state’s jobseekers. Furthermore, it’s clear that the economy needs to create more full-time jobs – not just any jobs – to enable working North Carolinians to make ends meet in the months and years ahead.