Capitol Alert

Employment distress affects 2.9 million Californians

Job-seekers drive through the Aldi warehouse to get their applications Friday, Nov. 13. 2015, in Moreno Valley, Calif. Grocer Aldi handed out “drive-through” applications for warehouse jobs at its store in Moreno Valley. The company planned to hire more than 100 workers for its distribution center.
Job-seekers drive through the Aldi warehouse to get their applications Friday, Nov. 13. 2015, in Moreno Valley, Calif. Grocer Aldi handed out “drive-through” applications for warehouse jobs at its store in Moreno Valley. The company planned to hire more than 100 workers for its distribution center. AP

Officially, 1.1 million Californians are unemployed, half as many as the state had during the depths of the Great Recession.

However, a new analysis of employment data by the Legislature’s budget adviser suggests that when the underemployed and labor force dropouts are added to the official number, job distress affects nearly three times as many Californians.

The Legislative Analyst’s Office data come from the federal Bureau of Labor Statistics and the state Department of Employment.

The official unemployment rate is the percentage of those in the labor force who are jobless, but the BLS has an additional measure, dubbed “U-6”, of “labor force underutilization.” It includes not only the unemployed, but “all marginally attached workers, plus the total employed part-time for economic reasons,” meaning involuntarily.

California’s U-6 rate has been at or near the highest in the nation for a number of years, approaching 20 percent during the depths of the Great Recession, but dropped to 12 percent currently, still higher than the national rate of 10.1 percent and higher than it was before recession hit.

Another bit of data included in the Legislative Analyst’s Office report comes from California’s EDD, measuring the number of Californians not in the labor force but who want jobs. That rate has been declining, but still is 6.9 percent of those not counted in the labor force.

All in all, the LAO report concludes, “These numbers suggest that around 2.9 million Californians are unemployed, underemployed or wanting a job but not looking for one now.”

That translates into nearly 15 percent of the state’s 20 million potential workers who are unemployed or underemployed, or nearly three times the official unemployment rate.

The LAO’s data don’t include, however, the state’s steadily declining rate of “labor force participation” – the percentage of Californians of working age who are actually working or want to work. The current number is 62 percent, nearly a full percentage point lower than the national rate.

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