The unemployment
rate; which refers to the percentage of individuals in the
labor force without a job who are available for and actively
seeking work; is the primary measurement of changes in labor
underutilization. Unemployment rates are derived each month
from the Current Population Survey (CPS). There are six
alternative measures available through the CPS which provide
narrower as well as broader definitions of labor
underutilization. These alternative measures, which are
referred to as U-1 through U-6, are available on a quarterly
basis and are based on the most recent four quarters of CPS
data.
The state unemployment
averages which are derived solely from the CPS data are not
strictly comparable to the official state average unemployment
rates, which also incorporate establishment employment
estimates, unemployment insurance claims data and historic
trends. However, these alternative measures can provide
insight into the volume of states’ discouraged populations,
marginally attached individuals and those working part-time
for economic reasons.
- The
U-3 rate is the rate closest to the standard definition of
unemployment - individuals in the labor force without a
job, who are available for and actively seeking work -
Rhode Island’s annual average unemployment rate for the
four quarters ending March 2013 obtained directly from the CPS
survey* was 9.8 percent.
- Expanding
this definition to include “discouraged workers”
(U-4), individuals who want a job, but have given up
looking for work because they believe there is no work
available for them, would yield an unemployment rate of 10.2 percent, or four-tenths a percentage point higher
(+0.4%)
than the standard definition. Prior to the recession,
inclusion of this group would have yielded an unemployment
rate two-tenths of a percentage point higher (+0.2%) than
the standard definition.
- The
inclusion of discouraged workers and those “marginally
attached” (U-5), individuals who want a job, are
currently available for work, but have not looked in the
past twelve months for a variety of reasons other than
discouragement, yields an unemployment rate of 11.0
percent or 1.2 percentage points higher than the standard
definition. Prior
to the recession, marginally
attached workers represented eight-tenths of a percentage
point (0.8%) of the labor force.
- The
broadest measure of unemployment (U-6), which includes
discouraged workers, marginally attached workers and those
working part-time for economic reasons, yields an
unemployment rate of 16.7 percent, 6.9 percentage points higher than the rate calculated
using the official definition, with most of the increase
(+5.7 percentage points) associated with the involuntary
part-time worker. Prior to the recession involuntary
part-time workers represented 2.7 percent of the labor
force.
Alternative Measures of Labor Underutilization
for Rhode Island |
Four
Quarter
Average Ending |
Standard
Rate (U3) |
Alternative
Rates |
| U4 |
U5 |
U6 |
| December
2006 |
5.2% |
5.4% |
6.2% |
8.9% |
| December
2007 |
4.9% |
5.0% |
5.7% |
8.3% |
| December
2008 |
7.9% |
8.2% |
9.2% |
13.2% |
| December
2009 |
11.2% |
11.7% |
12.5% |
19.1% |
| December
2010 |
11.3% |
11.8% |
12.5% |
19.2% |
| December
2011 |
11.1% |
11.7% |
12.7% |
18.6% |
| December
2012 |
10.5% |
10.9% |
11.8% |
17.6% |
|
March
2013 |
9.8% |
10.2% |
11.0% |
16.7% |
|
U3 -total unemployed persons as a percentage of the
civilian labor force
U4 -total unemployed
persons plus discouraged workers as a percentage of the
civilian labor force plus discouraged workers
U5 -total unemployed
persons plus discouraged workers plus all other
marginally attached workers as a percentage of the
civilian labor force plus discouraged workers plus all
other marginally attached workers.
U6 -total unemployed
persons plus discouraged workers, other marginally
attached workers, and
all those employed part-time for economic reasons, as a percentage of the civilian labor force plus
discouraged workers plus all other marginally attached workers.
*
Rhode Island’s official state average unemployment rate for this
period was 10.0 percent.
|
Bureau
of Labor Statistics' Alternate Measures of Labor
Underutilization Website |
|
