A New Look at Unemployment in Minnesota

Minnesota's official unemployment rate tells a lot about the share of the labor force who have untapped potential to offer. But it doesn’t tell us 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. Unemployment rates for Black or African American workers and Hispanic or Latino workers remain well above the statewide rate. And while Black and White unemployment rates have fallen compared to 12 months ago, Hispanic unemployment has risen.

Minnesota unemployment rates by race or ethnicity as of August 2014:

  • All workers statewide, 4.4 percent, compared to 5.1 percent 12 months ago
  • Black or African American, 10.4 percent, compared to 15.1 percent 12 months ago
  • Hispanic or Latino, 8.7 percent, compared to 6.4 percent 12 months ago
  • White, 3.9 percent, compared to 4.8 percent 12 months ago


  unemployment-race_2014-08


Unemployment by age and gender

We also find differences when we break out rates by age or gender. The unemployment rate for teens has fallen to a six-year low. Unemployment rates for women and men both continue to fall as well.

Minnesota unemployment rates by age and gender as of August 2014:

  • All workers statewide, 4.4 percent, compared to 5.1 percent 12 months ago
  • Teens (age 16-19), 13.0 percent, compared to 16.7 percent 12 months ago
  • Men, 4.9 percent, compared to 5.4 percent 12 months ago
  • Women, 3.9 percent, compared to 4.8 percent 12 months ago


unemployment-gender_2014-08 


The gap between genders has narrowed, though men historically see consistently higher employment and unemployment rates than women. Labor force is the sum of employed and unemployed persons. Since men historically have higher participation rates, this means they can have both higher employment and higher unemployment than women at the same time.

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 August 2014:

  • U3 Officially unemployed, 4.4 percent, compared to 5.1 percent 12 months ago
  • U4 Discouraged plus officially unemployed, 4.7 percent, compared to 5.3 percent 12 months ago
  • U5 Marginally attached plus discouraged and officially unemployed, 5.4 percent, compared to 6.1 percent 12 months ago
  • U6 Part-time underemployed plus marginally attached, discouraged, and officially unemployed, 9.5 percent, compared to 11.0 percent 12 months ago 
  • Breaking out U6 Part-time underemployed as a category by itself (persons working less than 35 hours per week who want, but cannot find, a full-time job, shown in purple on the graph), we find the current rate is 4.1 percent, compared to 4.9 percent 12 months ago


u3-u6_2014-08 


What do these measures mean?

The official unemployment measure, called U3, 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 last looked for work a month ago or 12 months ago and decided there are no jobs available that fit their qualifications? These marginally attached “discouraged workers” reveal additional untapped potential and are included in a broader measure called U4.

And what if we add all the other marginally attached workers, people who looked for work sometime in the past 12 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 U5 measure.

And finally, U6 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.