The unemployment rate speaks to labor market conditions including the availability of labor and the level of economic distress. But the unemployed are not the only potential pool of new hires and not the only ones experiencing economic distress.
The official definition of “unemployed” includes only those people who are jobless and have actively looked for work in the past month. “Marginally attached workers” are jobless, want to work, but have given up looking for work because they believe there are no jobs currently available for them. Then there are the workers who want to work full time but currently are working part time (less than 35 hours a week) because they are unable to find full-time jobs.
Recognizing these other forms of labor market distress, the U.S. Bureau of Labor Statistics has developed six alternative measures of labor underutilization. Find the BLS measures and descriptions at https://www.bls.gov/lau/stalt.htm.
Labor Underutilization in Idaho
The U.S. Bureau of Labor Statistics publishes the alternative measures of labor underutilization for the states once a year. Early this year, it released 2018 data showing Idaho had 25,900 unemployed residents, 1,000 discouraged workers, another 4,300 residents marginally attached to the labor force and 22,900 involuntary part-time workers. In total, 54,000 workers met the definitions of labor underutilization, and Idaho’s U-6 rate was 6.3 percent.
As the following two graphs below show, the number of marginally attached and involuntary part-time workers tends to grow significantly during recessions (the 2008-2010 period, for example) and decrease when unemployment is falling.
Idaho’s U-3 (official unemployment rate), U-4 (unemployed plus discouraged workers), U-5 (unemployed plus all marginally attached workers) and U-6 (unemployed with marginally attached workers and involuntary part time) are shown on the following graph.
Estimating Underutilization for Idaho Counties
To develop estimates of the alternative measures for Idaho counties, the model uses county labor force and unemployment statistics from the Local Area Unemployment Statistics program, which produces the monthly unemployment rates, and the five-year estimates from the Census Bureau’s American Community Survey along with the statewide measures of marginally attached workers and involuntary part-time workers. To estimate discouraged workers and marginally attached workers by county, the model assumes each county has the same ratio of workers to total unemployment as does the state.
Labor Underutilization in 2018
Another Aspect of Underemployment
Underemployment occurs when workers’ jobs do not use all their availability to work, skills and education. The alternative measures of labor underutilization only assess one form of underemployment — that of working too few hours. Measuring jobs that do not use the education or special skills of individuals would require data that is not available and difficult to quantify, and it would be a very expensive undertaking. That is why the U.S. Bureau of Labor Statistics does not measure it.
Kathryn.Tacke@labor.idaho.gov, regional economist
Idaho Department of Labor
(208) 799-5000 ext. 3984
Esther.Eke@labor.idaho.gov, regional economist
Idaho Department of Labor
(208) 236-6710 ext. 4331