Capitol Alert

California’s ‘labor underutilization’ rate still high

Field workers pick arugula at Full Belly Farm on Thursday, May 7, 2015 in Guinda, Calif. The freshly picked produce is packaged and trucked to businesses in the Bay area and Sacramento. Agriculture is one of the state’s most seasonal industries, which keeps its unemployment rate relatively high.
Field workers pick arugula at Full Belly Farm on Thursday, May 7, 2015 in Guinda, Calif. The freshly picked produce is packaged and trucked to businesses in the Bay area and Sacramento. Agriculture is one of the state’s most seasonal industries, which keeps its unemployment rate relatively high. rpench@sacbee.com

Although California’s official unemployment rate climbed out of the cellar during the year that ended June 30, it still had the nation’s second highest rate of total “labor underutilization,” according to a new federal government report.

The state’s unemployment rate shot up to well over 12 percent during the Great Recession and was at or near the highest in the nation for several years. It’s since dropped markedly and averaged 6.8 percent during the 2014-15 period, the Bureau of Labor Statistics says.

Despite the improvement, California’s rate was still lower than those of just five other states and tied with South Carolina. But the widely quoted jobless rate – the percentage of the civilian labor force that’s unemployed – is just one of six ways the BLS measures labor data.

Another is the percentage of the labor force that’s unemployed 15 weeks or more. Nationally, it averaged 2.6 percent in 2014-15. California averaged 3.2 percent, eighth highest and tied with Connecticut.

A third is the proportion of the labor force that’s unemployed, plus “discouraged workers” who have stopped looking for work. California’s 2014-15 average, 7.2 percent, was surpassed only by those of six other states.

The most telling measure however, dubbed U-6 by the BLS, counts not only the unemployed, but workers who are only “marginally attached” to the labor force and those involuntarily working part-time.

Labor economists consider U-6 to be the fullest measure of a state’s or a region’s employment health. California’s 2014-15 U-6 rate was 14 percent, second only to Nevada’s 15.2 percent.

The BLS also calculates separate U-6 rates for New York City and Los Angeles County. Los Angeles’ 16 percent would, were the county and its 10 million people a separate state, be the nation’s highest rate of “labor underutilization.”

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