California’s official unemployment fee — the proportion of jobless employees among the many state’s labor power — remained unchanged in September at 5.3%.
That doesn’t sound alarming, until one dives extra deeply into the information.
For one factor, it signifies that barely greater than one million California adults who say they wish to work can’t discover jobs, 64,100 greater than a yr prior, in response to California’s Employment Improvement Division. California’s jobless fee is persistently among the many highest within the nation.
The speed is clearly affected not solely by the variety of these looking for work and never discovering it, however by the dimensions of the labor power, which the federal authorities defines as these 16 years and older who’re both working or in search of work.
The state’s labor power participation fee hit a excessive of 68% of its adults in 1990, has dropped steadily since, and is now beneath 63%, in response to the Public Coverage Institute of California. Presently, the state pegs the labor power at 19.4 million, of which 18.4 million are working.
However working at what and the way a lot?
Formally, individuals are counted as employed if they’re working for wages as little as one hour per week. That minimalist definition makes employment statistics seem extra optimistic than actuality warrants.
Though the federal Bureau of Labor Statistics releases the broadly cited official unemployment charges every month, the company additionally acknowledges their limitations and points different indices that paint a extra correct image.
Essentially the most detailed, dubbed U-6, is outlined as “total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.”
Usually, U-6 charges are practically twice as giant because the official unemployment charges. Presently, the standard unemployment fee for the nation is 4.1% however its U-6 fee is 7.7%. Via the primary half of 2024, California’s U-6 fee was 9.6%, the best of any state.
California’s excessive measurement implies that it has disproportionate ranges of part-time employees or individuals who could also be counted as potential employees however usually are not notably keen on getting jobs.
Mixed with the state’s declining labor power participation, its excessive U-6 measure reveals a less-than-healthy employment state of affairs and explains, not less than partially, why employers discover it tough to seek out certified employees though there are greater than one million people who find themselves theoretically looking for jobs.
However the image is even cloudier when one overlays an much more nuanced measure superior by the Washington-based Ludwig Institute for Shared Financial Prosperity, what it calls the “True Rate of Unemployment,” or TRU.
TRU calculates the proportion of “functionally unemployed” members of the labor power, outlined as “the jobless plus those seeking, but unable to find, full-time employment paying above poverty wages (pegged at $25,000 a year in 2024 dollars).”
Whereas the nation’s historically calculated unemployment fee was 4.1% in September, Ludwig pegged its “true rate” at 23.9%, practically six instances as excessive — and California was very near the nationwide fee at 23.5%. Quite a few different states had been worse.
Ludwig additionally calculates TRU for your entire grownup inhabitants, not simply the labor power, and in California it’s 52.5%, that means fewer than half are working jobs that pay a residing wage.
That’s — or must be — a disturbing quantity, and contributes to California having such a lot of employees incomes incomes that can’t deal with the state’s extremely excessive prices of housing, utilities or different requirements of life.
Dan Walters is a CalMatters columnist.
