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, Hispanic, and White unemployment rates all have fallen compared to 12 months ago. But rates for Black and Hispanic workers remain above the statewide rate.

Black unemployment edged down to 11.3 percent in February but remains above the September 2014 level of 10.2 percent. Hispanic unemployment has been falling steadily from an August 2014 level of 8.7 percent and is now 5.4 percent.

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

  • All workers statewide, 3.9 percent, compared to 4.8 percent 12 months ago
  • Black or African American, 11.3 percent, compared to 12.8 percent 12 months ago
  • Hispanic or Latino, 5.4 percent, compared to 7.9 percent 12 months ago
  • White, 3.2 percent, compared to 4.3 percent 12 months ago

  unemployment-race_2015-02

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 edged up from 10.2 percent in January to 10.5 percent in February but remains at its lowest level since 2003. Unemployment rates for women, men, and teens all continue to fall relative to 12 months ago.

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

  • All workers statewide, 3.9 percent, compared to 4.8 percent 12 months ago
  • Teens (age 16-19), 10.5 percent, compared to 14.1 percent 12 months ago
  • Men, 4.4 percent, compared to 5.2 percent 12 months ago
  • Women, 3.4 percent, compared to 4.4 percent 12 months ago

unemployment-gender_2015-02 

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 February 2015 stood at 29,200 persons, still well above pre-recession levels.

Minnesota long-term unemployment as of February 2015:

  • Statewide number of long-term unemployed, 29,200 persons, compared to 40,200 12 months ago
  • Statewide long-term unemployed as a share of total unemployed (U-3), 24.9 percent, compared to 28.3 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_2015-02

Alternative measures of unemployment

Beyond these demographic differences, we can also learn 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 February 2015:

  • U-3 Officially unemployed, 3.9 percent, compared to 4.8 percent 12 months ago
  • U-4 Discouraged plus officially unemployed, 4.2 percent, compared to 5.1 percent 12 months ago
  • U-5 Marginally attached plus discouraged and officially unemployed, 4.9 percent, compared to 5.8 percent 12 months ago
  • U-6 Part-time underemployed plus marginally attached, discouraged, and officially unemployed, 8.5 percent, compared to 10.4 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 3.6 percent, compared to 4.6 percent 12 months ago

u3-u6-rates_2015-02 

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

Recent declines in unemployment mean that Minnesota’s economy is running closer to its full potential than before. But 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.