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Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
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Alternative Measures of Labor Underutilization for States, 2009 Annual Averages [5 February 2010]

http://www.bls.gov/lau/stalt.htm

Six alternative measures of labor underutilization have long been available on a monthly basis from the Current Population Survey (CPS) for the United States as a whole. They are published in the Bureau of Labor Statistics' monthly Employment Situation news release. (See table 15.) The official concept of unemployment (as measured in the CPS by U-3 in the U-1 to U-6 range of alternatives) includes all jobless persons who are available to take a job and have actively sought work in the past four weeks. This concept has been thoroughly reviewed and validated since the inception of the CPS in 1940. The other measures are provided to data users and analysts who want more narrowly (U-1 and U-2) or broadly (U-4 through U-6) defined measures.

BLS made these alternative measures for states available beginning with annual averages for 2008. Annual averages for 2005, 2006, and 2007 are available as well. BLS is committed to updating these data on a 4-quarter moving-average basis. The analysis that follows pertains to the averages from the first through fourth quarters of 2009. For the purpose of this analysis, the data will be referred to as "4-quarter averages," though it should be noted that, in this instance, the 4-quarter averages are equal to the annual averages for 2009. Data for the second quarter of 2008 through first quarter of 2009, third quarter of 2008 through second quarter of 2009, and fourth quarter of 2008 through third quarter of 2009 are also available.

The six state measures are based on the same definitions as those published for the U.S.:

    * U-1, persons unemployed 15 weeks or longer, as a percent of the civilian labor force;

    * U-2, job losers and persons who completed temporary jobs, as a percent of the civilian labor force;

    * U-3, total unemployed, as a percent of the civilian labor force (this is the definition used for the official unemployment rate);

    * U-4, total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers;

    * U-5, total unemployed, plus discouraged workers, plus all other marginally attached workers, as a percent of the civilian labor force plus all marginally attached workers; and

    * U-6, total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.

Generally, all six measures move together over time, including across business cycles. Similarly, states that have high unemployment rates tend to have high values for the other five measures; the reverse is true for states with low unemployment rates. Note that, in the table and in the comparisons below, the unemployment rates (U-3) that are shown are derived directly from the CPS, because this is the only source of data for the various components. As a result, these U-3 measures may differ from the official state unemployment rates for the same period. The latter are estimates developed from statistical models that greatly improve the reliability of the top-side labor force and unemployment estimates. Those models, developed by the Local Area Unemployment Statistics (LAUS) program, incorporate CPS estimates, as well as input data from other sources. The model-based estimates are accessible through the LAUS program homepage. The official model-based annual averages for 2009 will be released on February 26, 2010.

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This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.

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Stuart Basefsky                   
Director, IWS News Bureau                
Institute for Workplace Studies 
Cornell/ILR School                        
16 E. 34th Street, 4th Floor             
New York, NY 10016                        
                                   
Telephone: (607) 255-2703                
Fax: (607) 255-9641                       
E-mail: smb6@cornell.edu                  
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