May 14, 2018
How Do We Know Who is Still Left Behind in New Jersey in Today's Economy?
The economic recovery has led to pre-recession unemployment rates in the nation. However, even with the unemployment rate reaching pre-recession levels, there are individuals in the U.S. labor market who remain underemployed, or discouraged and no longer actively looking for jobs. These people are captured in what is called the “ alternative measures of unemployment .”
These measures look at participation (or lack of participation) in the labor market in a broader way than the traditional unemployment rate, allowing for a more complete assessment of the labor market. To illustrate the variety of unemployment measures, and analyze the differences between the measures over time and between New Jersey and the United States, Heldrich Center researchers, led by Stephanie Holcomb, developed a data story using employment data from the Bureau of Labor Statistics.
While the official unemployment rate suggests a tight labor market, the inclusion of additional data points like long-term unemployment, marginally attached workers, and involuntary part-time workers, shows a labor market that has left many individuals behind . In New Jersey, as shown on slide #3 of the data story , approximately 206,000 individuals are currently unemployed. However, when all marginally attached individuals are added, that number goes to over 250,000; adding involuntary part-time workers increases this total to over 415,000. Though the official unemployment rate is low, when adding in others who would like to work but are not currently looking plus those who are working part time but would like to work full time, the number more than doubles.
Heldrich Center researchers analyzed each alternative measure of unemployment over time in New Jersey and the United States. Recovery has been stronger for the United States overall than for New Jersey, with the gap between the official rate (U-3) and the broadest measure (U-6) still being high in New Jersey, indicating that the recovery has left behind many New Jersey workers who would like to work more hours, or find more suitable employment.
The number of individuals who are working part time involuntarily remains high both nationally and for New Jersey. Slides throughout the data story allow readers to view rates and levels for each measure, and compare these between New Jersey and the United States. Assessing these additional measures is critical when seeking a holistic view of the current New Jersey labor market.
Definitions : The alternative measures of unemployment range from U-1 to U-6, with U-3 being the official measure of unemployment. The measures include:
  • U-1: Individuals unemployed for 15 weeks or more
  • U-2: Those who have lost their jobs and individuals completing temporary jobs
  • U-3: Total unemployed individuals as a percent of the civilian labor force
  • U-4: U-3 plus discouraged workers (those who want to work but are not actively seeking employment because they do not believe jobs are available for them)
  • U-5: U-3 plus all marginally attached workers (including discouraged workers plus others who are not actively seeking employment for a variety of reasons such as being in school, taking care of family members, etc.)
  • U-6: U-5 plus persons employed part time for economic reasons (also known as “involuntary part-time workers” who would prefer to work full time and are considered “underemployed”)
Lead Staff Member : Stephanie Holcomb, Research Associate, is a member of the Heldrich Center’s research and evaluation team, and conducts quantitative and qualitative research, such as implementation and process evaluations, in several policy areas such as employment and training, higher education, and social welfare. She specializes in synthesizing and analyzing complex administrative datasets, developing data stories that visually display data findings, and the development of interactive dashboards.