Broad unemployment metric puts N.J. in middle of pack

The government’s broadest measure of unemployment and under-employment shows the labor situation in New Jersey is about average.

The government’s broadest measure of unemployment and under-employment shows the labor situation in New Jersey is about average.

The Bureau of Labor Statistics Monday reported 16 percent of the state’s workers were “underutilized” in 2011. That statistic includes the 9.4 percent of New Jerseyans considered unemployed in 2011, as well as those working part-time instead of full-time, due to the economy; and those who were unemployed and open to work, but weren’t actively seeking it.

New Jersey’s 16-percent underutilization rate — referred to as the U-6 rate by the government — was up slightly from 2010 (15.7 percent) and in line with the national figure of 15.9 percent.

Joel L. Naroff, president of Naroff Economic Advisers, said the U-6 number tells a broader story than the unemployment rate alone, because when things are difficult, many people have to take any job they can get, even if it’s only for a few hours a week.

“If they take a job, they’re technically not unemployed,” Naroff said. “And as a result of that, the unemployment rate may be lower than people feel it really is, because there’s an awful lot of people basically just getting by.”

Martin Kohli, regional economist with the U.S. Bureau of Labor Statistics, said workers in sectors like retail might have kept their jobs, but worked less, “because stores are not selling as much.”

The oft-quoted unemployment rate only includes those out of work who actively sought work within the four weeks before they were surveyed.

Thus, the unemployment rate wouldn’t include workers who lost their full-time jobs but found part-time work, even if those workers are still seeking full-time positions. The unemployment rate also doesn’t include what the government terms the “marginally attached.” That category covers people who are out of work but want to work, and have searched for employment within the past year, but not within the past four weeks.

In addition to the 427,100 unemployed residents in the Garden State last year, 231,800 were working only part-time jobs for economic reasons. 84,200 were deemed “marginally attached.”

While the relatively high number of part-time workers who want full-time jobs is a symptom of economic weakness, Naroff said it’s not all bad news, since some of those part-time jobs could lead to full-time work.

“Often in recoveries what businesses do is they dip their toes into the hiring waters,” he said. “When you see this happening — an increase in part-time workers — it shouldn’t be considered a negative. It is the modern way that businesses operate. They just don’t run out and commit themselves that quickly.”

Aside from giving a wider picture of the labor market, Kohli said the report also helps clear up misinformation about the labor picture.

“There is a widespread impression that we don’t count discouraged workers,” he said. “Part of the purpose of putting out surveys like this is to sort of document how many people are discouraged workers.”

Discouraged workers are those who aren’t currently looking for work because they don’t think there are any jobs available for them. According to the survey, 36,100 New Jersey residents were discouraged workers last year, accounting for 43 percent of the wider “marginally attached” category.

Kohli said many of those who don’t realize the government counts discouraged workers think the so-called “real” unemployment rate would be something like 20 percent if discouraged workers were counted. Instead, Monday’s report indicates a broad accounting of the unemployed and underemployed shows about 16 percent of workers are losing work as a result of the economy.

Nationally, Nevada (22.7 percent) had the highest underutilization rate in 2011. North Dakota (6.6 percent) had the lowest rate.