THIS IS THE REAL JOBS NUMBER TO WATCH
The most watched economic indicator in America – and in South Carolina – is the official government unemployment rate. For those of you educated in one of the Palmetto State’s failing public schools, this rate is defined as the percentage of the civilian labor force that is presently without a job. On this number ride the fortunes of presidents, governors and other leaders – with the media apportioning blame and credit based on the best efforts of these politicians to “spin” them.
But is the unemployment rate really the number we should be following?
No. As we’ve suggested ad nauseam, a “broader, more accurate” measure of joblessness would include what the U.S. Bureau of Labor Statistics (BLS) refers to as “discouraged workers,” “marginally attached workers” and workers who are “employed part-time for economic reasons.” In fact the federal government tracks this data – releasing it every month at the national level and on a quarterly basis at the state level.
So what is South Carolina’s “underemployment rate?” Based on estimates taken from the third quarter of 2011 through the end of the second quarter of 2012 – it currently stands at 17 percent, which is 7.6 percentage points higher than the state’s 9.4 percent unemployment rate. Nationally, the rate stands at 15 percent – or 6.7 percentage points higher than the country’s official unemployment rate.
That’s a lot of “discouraged” and “marginally attached” workers, people … although believe it or not things are better now than they were (for the time being). The annual underemployment rate average for South Carolina last year was 18.2 percent. Meanwhile the annual average for 2009 was a whopping 19.6 percent – meaning roughly one out of every five South Carolinians was “underemployed.”
These numbers are important because they do a better job of showing how a shrinking labor force impacts the real employment situation.
Think about it like this … what good is a major decrease in the official unemployment rate if the reduction was spawned by people giving up their search for work? Obviously that’s not something that’s going to help the economy … so why would we “celebrate” it?
Here at FITS, we are committed to reporting not only official government unemployment rates, but also the broader “underemployment” rates and any changes in the size of the labor force. Taken together, all of these numbers give a fuller, more accurate reading of where our state and our nation are heading.