Alternative Measures of Unemployment in Minnesota

Minnesota's official unemployment rate tells us a lot about the share of people in the labor force who have untapped potential to offer. But it doesn't tell the whole story. We can learn more by looking at race, age, and gender, and by looking beyond the traditional unemployment rate. Please note that all data below are presented as 12-month moving averages.

Unemployment by race or ethnicity

When we break out unemployment rates by race, we find that some communities face greater challenges than others. Black unemployment has been rising since last autumn and reached 14.4 percent in May, its highest level since December 2013 but still below the rates seen during the 2007 to 2009 recession. Hispanic unemployment has been falling steadily from an August 2014 level of 8.7 percent and is now 4.5 percent, the lowest rate since April 2006.

Minnesota unemployment rates by race or ethnicity as of May 2015:

  • Black or African American, 14.4 percent, compared to 10.3 percent 12 months ago
  • Hispanic or Latino, 4.5 percent, compared to 8.5 percent 12 months ago
  • White, 2.9 percent, compared to 4.2 percent 12 months ago
  • All workers statewide, 3.8 percent, compared to 4.6 percent 12 months ago

  unemployment-race_2015-05

Also see the American Community Survey for a broader selection of unemployment data by race or origin, including White, Black or African American, Hispanic or Latino, American Indian and Alaskan Native, Asian, and more. Note that the American Community Survey data are collected and calculated by a method which differs from the Current Population Survey numbers shown above.

Unemployment by age and gender

We also find differences when we break out rates by age or gender. The unemployment rate for teens continues a dramatic descent which began in 2011 and gained speed after the first quarter of 2013. Unemployment rates for women, men, and teens all are lower than 12 months ago. Learn more about the trend in teen unemployment in Minnesota Employment Review.

Minnesota unemployment rates by age and gender as of May 2015:

  • Teens (age 16-19), 10.1 percent, compared to 13.9 percent 12 months ago
  • Men, 4.2 percent, compared to 5.1 percent 12 months ago
  • Women, 3.4 percent, compared to 4.2 percent 12 months ago
  • Compared to all workers statewide at 3.8 percent in May and 4.6 percent 12 months ago

unemployment-gender_2015-05 

The long-term unemployed

Long-term unemployment—lasting 27 weeks or more—imposes costs on people that go well beyond lost wages. Future earnings are lower, and health, relationships, and self-esteem can suffer. The number of long-term unemployed following the Great Recession peaked in August 2011 at 75,100 persons and as of May 2015 stood at 27,000 persons, still well above the level of 18,000 persons at the start of the recession in December 2007.

Minnesota long-term unemployment as of May 2015:

  • Statewide number of long-term unemployed, 27,000 persons, compared to 36,600 persons 12 months ago
  • Statewide long-term unemployed as a share of total unemployed (U-3), 23.5 percent, compared to 26.8 percent 12 months ago

It is important to note that the percentage of long-term unemployed persons is a share of unemployed persons only, not a share of the entire labor force.

long-term_2015-05 

Alternative measures of unemployment

We can learn still more about Minnesota's labor market by looking at alternative measures of unemployment defined by the U.S. Bureau of Labor Statistics.

Minnesota unemployment rates by alternative measures as of May 2015:

  • U-3 Officially unemployed, 3.8 percent, compared to 4.6 percent 12 months ago
  • U-4 Discouraged plus officially unemployed, 4.1 percent, compared to 4.9 percent 12 months ago
  • U-5 Marginally attached plus discouraged and officially unemployed, 4.8 percent, compared to 5.7 percent 12 months ago
  • U-6 Part-time underemployed plus marginally attached, discouraged, and officially unemployed, 8.0 percent, compared to 10.1 percent 12 months ago
  • Part-time underemployed (component of U- 6, including only persons working less than 35 hours per week who want, but cannot find, a full-time job), is 3.2 percent, compared to 4.4 percent 12 months ago

u3-u6-rates_2015-05 

What do these measures mean?

The official unemployment measure, called U-3, is the share of the labor force aged 16 and over who, at the time of the monthly survey, have been unemployed for the past week and have looked for work sometime in the past four weeks.

But what about people who looked for work within the past twelve months but not in the past four weeks because they believed there were no jobs available that fit their qualifications? These marginally attached “discouraged workers” reveal additional untapped potential and are included in a broader measure called U-4.

And what if we add all the other marginally attached workers, people who looked for work sometime in the past twelve months but, for other reasons, did not look in the past four weeks? These other marginally attached workers expand the count still further in the U-5 measure.

And finally, U-6 includes all of the above and adds people who are employed part-time but want full-time work.

Looking ahead

Falling unemployment and underemployment mean that Minnesota’s economy is running closer to its full potential than before. By looking at race, age, gender, and additional measures of unemployment, we can see where there is still more work to be done.

Note: Data above are presented as 12-month moving averages. Each monthly data point is an average of that month and the previous 11 months. Twelve-month moving averages are calculated differently than the official estimates of unemployment and should not be compared directly.