The graph above displays three rates of unemployment and two rates of underemployment from January 1994 to present. The respective unemployment rates are the overall unemployment rate; the unemployment rate for workers seeking full-time jobs; and the unemployment rate for workers seeking part-time jobs. The two underemployment rates incorporate data on involuntary part-time workers, people who are stuck in part-time jobs as they look for full-time work. (The graph goes back to 1994 because the Bureau of Labor Statistics changed how it measures part-time employment in January of that year.)
Since late 2009, there has been a dramatic decline in unemployment – though the decline has been partly driven by workers dropping out of the labor force. However, as can be seen in the figure above and in the table below, the decline in unemployment obscures other problems in today’s labor market. The unemployment rate today is lower than the average rate from 1994 to 2007 but is higher than the rate from before the recession (the first seven months of 2007). In a general sense, this is true for workers seeking both full-time and part-time jobs. However, while unemployment is in the middle of the 1994-2007 interquartile range for workers seeking full-time jobs, it is at the low end for workers seeking part-time jobs. This means that unemployed workers are struggling to find full-time jobs in today’s economy.
An even more important problem is the relatively high rate of underemployment. The current underemployment rate is well above average (+0.7 percentage points), and is a full 1.4 percentage points higher than the rate from 2007. Similar results hold when we restrict our sample to workers seeking full-time jobs.
These results show that although unemployment is declining, workers are having trouble finding full-time jobs. Not only is the unemployment rate among full-time workers higher than we should expect given an overall unemployment rate of 4.9 percent – even when these workers find jobs, they are only getting part-time hours.
|Description||Interquartile Range, 1994 to 2007, Excluding Recessions||Average Rate, 1994 to 2007, Excluding Recessions||First Seven Months of 2007||First Seven Months of 2016|
|Unemployment Rate||Unemployed Workers as a share of Unemployed Workers and Employed Workers||4.6% to 5.7%||5.1%||4.6%||4.9%|
|Underemployment Rate||Unemployed Workers and Involuntary Part-Time Workers as a share of Unemployed Workers and Employed Workers||7.3% to 8.9%||8.1%||7.4%||8.8%|
|Unemployment Rate, Full-Time Workers||Unemployed Workers Seeking Full-Time Jobs as a share of Unemployed Workers Seeking Full-Time Jobs, Involuntary Part-Time Workers, and Employed Full-Time Workers||4.2% to 5.4%||4.9%||4.3%||4.7%|
|Underemployment Rate, Full-Time Workers||Unemployed Workers Seeking Full-Time Jobs and Involuntary Part-Time Workers as a share of Unemployed Workers Seeking Full-Time Jobs, Involuntary Part-Time Workers, and Employed Full-Time Workers||7.5% to 9.2%||8.3%||7.6%||9.1%|
|Unemployment Rate, Part-Time Workers||Unemployed Workers Seeking Part-Time Jobs as a share of Unemployed Workers Seeking Part-Time Jobs and Workers Employed Part-Time Voluntarily||6.3% to 7.1%||6.7%||6.0%||6.4%|
Source: Bureau of Labor Statistics