California’s official unemployment rate — the percentage of jobless workers among the state’s labor force — remained unchanged in September at 5.3%.
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That doesn’t sound alarming, unless one dives more deeply into the data.
For one thing, it means that slightly more than a million California adults who say they want to work can’t find jobs, 64,100 more than a year prior, according to California’s Employment Development Department. California’s jobless rate is consistently among the highest in the nation.
The rate is obviously affected not only by the number of those seeking work and not finding it, but by the size of the labor force, which the federal government defines as those 16 years and older who are either working or looking for work.
The state’s labor force participation rate hit a high of 68% of its adults in 1990, has dropped steadily since, and is now below 63%, according to the Public Policy Institute of California. Currently, the state pegs the labor force at 19.4 million, of which 18.4 million are working.
But working at what and how much?
Officially, persons are counted as employed if they are working for wages as little as one hour per week. That minimalist definition makes employment statistics appear more positive than reality warrants.
Although the federal Bureau of Labor Statistics releases the widely cited official unemployment rates each month, the agency also recognizes their limitations and issues other indices that paint a more accurate picture.
The most detailed, dubbed U-6, is defined 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.”
Typically, U-6 rates are nearly twice as large as the official unemployment rates. Currently, the traditional unemployment rate for the nation is 4.1% but its U-6 rate is 7.7%. Through the first half of 2024, California’s U-6 rate was 9.6%, the highest of any state.
California’s high measurement implies that it has disproportionate levels of part-time workers or people who may be counted as potential workers but are not particularly interested in getting jobs.
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