Underemployment Edges Up in 2013 as Official Unemployment Drops

Idaho’s official unemployment rate fell steadily during 2013, while the rate of workers faced with underemployment edged up.

Over 11,000 workers found jobs in 2013 including 3,000 new entrants to the labor force, driving the official jobless rate down over a percentage point to 6.2 percent. At the same time, the number of workers considered underemployed rose by almost the same amount, pushing underemployment up more than a full point to 18.2 percent, a reflection of a persisting rise in part-time jobs and the dominance of service sector employment since the recovery began in 2010.

The combined unemployment and underemployment rate for the state was 24.4 percent, up four-tenths of a point from 2012.

Underemployment is not a hard and fast statistic, is based on a number of assumptions and does not attempt to measure holiday or seasonal workers.

These underemployment statistics, compiled by John Panter, a principal research analyst for the Idaho Department of Labor come from two categories:

Employed workers who are working part-time or temporary jobs and want full-time work based on the ratio of part-time and temporary jobs listed with the 25 local Labor Department offices.
Workers who have associate degrees or higher and are currently employed but have filed with a local office to find another job.

Underemployment rates also assume job listings and employment applications filed with the local Labor offices are numerous enough to represent current labor market conditions.

Total nonfarm jobs increased faster in Idaho than nationally during 2013, at times running as much as a tenth of a percentage point ahead of the nation.

Sixty-nine percent of the jobs generated in 2013 were in the service sector, which paid more than $11,000 less than goods production jobs in manufacturing, construction and natural resources.

That was essentially the reverse of the recession’s impact when 62 percent of the jobs lost were in goods production, which at the time paid about $9,000 a year more than service sector jobs.

As Idaho’s economy began to recover, post-recession job creation tilted toward the service sector, finding many goods production workers who were laid off during the downturn forced to take lower paying service sector jobs.

Compounding that development has been a rise in part-time employment. While that shift slowed markedly in 2013, the share of part time Idaho jobs rose another two-tenths of a percentage point to 24 percent. In 2008 as the recession was beginning to take hold, 19 percent of all nonfarm jobs were part-time, according to statistics compiled by the Current Population Survey.

The number of listings with the department’s local offices for full-time jobs went essentially unchanged from 2012 while the number of part-time or temporary workers still looking for full-time work rose 4 percent. The number of employed people with associate degrees or higher who were still looking for new jobs dropped another 5 percent after declining 7 percent in 2012.

Underemployment across Idaho remained at its second highest level of the past decade. Compensation is one of the key factors in determining underemployment, either in the case of involuntary part-time workers or those who took pay cuts after layoffs just to maintain a regular paycheck.

Idaho’s average weekly wage increased 1.9 percent during 2013, matching the increase nationally. At $708 a week, Idaho ranked 49^th among the states at 86 percent of the national average weekly wage.

While all regions of Idaho saw their official unemployment rates drop from 2012 to 2013, south central Idaho was the only region where the underemployment rate dropped markedly. With significant activity in food processing over the year, underemployment in that region fell nearly a full percentage point to 16.2 percent.

Southwestern Idaho, which holds the majority of population, workers and jobs, saw the underemployment rate hold steady at under 14 percent, while the other four regions saw increases ranging from 1.7 to 3.6 percentage points.