On The Unemployment Rate

http://www.emergingspirit.ca/files/images/Unemployment-LR2.preview.jpgI do not know if there’s much meaning to this, but I was bored a couple months back, and looked at state-by-state employment percentages: the percentage of the total population that is employed, calculated using the Bureau of Labor Statistics’ data from July. I think there’s a general understanding that unemployment rates don’t mean all that much — for instance, they account for those who are looking for work, but not for those who have been discouraged from looking, for having been unsuccessful for so long. (If we really wanted to capture unemployment as a phenomenon as most people understand it, the rates would be much higher, here and everywhere.)

And, even so, the unemployment rate is certainly far too high.

I found it interesting to realize that there’s little correlation between a state’s employment rate and its unemployment rate. (You’d expect a strong inverse correlation, all other things equal.)

I suppose I’m just wondering if others have thoughts on what might account for the differences, and whether such info is at all useful.

A few potential factors spring to mind:

1) Gender roles: Women consume, whether or not they work. If they’re part of the potential workforce at a higher rate in some states than in others, and if per-capita consumption stays constant, with a sizable chunk of any local economy based on the manufacture and distribution of goods for local consumption, then we’d expect the unemployment rate to be higher in the states with more women looking for work. (I couldn’t find state-by-state stats on women in the workforce, and so don’t know where RI stands here.)

2) Prison population: States with more prisoners have fewer people in the workforce per capita. (And having more people in prison requires more people to build prisons and service prisoners… creating jobs.) High-incarceration states have 3-4 times as many people in prison than do low-incarceration states.

3) ‘Discouraged’ workers aren’t counted in unemployment stats, and various cultural differences could lead to varying rates of discouragement.

Random tidbits:

* RI is right at the median — tied with UT, which has the second-lowest unemployment rate. About half of the states with below-mean unemployment rates also have below-mean ’employment’ rates. (They have asterisks next to them, below.) Some of those states are just about at bottom, in terms of percentage of residents who are employed.

* 38% more people, per capita, are employed in ND than in WV, though both have below-average unemployment rates.

* KS and AR have the same unemployment rate, but KS is top quintile in employment, and AR is bottom quintile.

Other state employment rates:


















































5 thoughts on “On The Unemployment Rate”

  1. Both points are valid. I’m not gonna claim that we’re the leader of the pack, but the point is that we’re far far far far far far far far far far far far far from the dregs of the universe. Or even, like, generally well better than average. In the richest country ever.

    If we are going to try to devise a path forward, we best understand where we’re starting from. I’ve spoken to so many state-house types who literally believe that we’re in the lowest quintile on per-cap income, wages, millionaires, etc… Things aren’t great, but this isn’t Alabama. And all the places with huge budget deficits and high unionization rates — NY, CA, etc — are the places everybody I know who leaves RI happen to move to.

  2. Mangeek makes an excellent point, it’s more about cost of living over the average wage than it is about the percentage of employment. It’s also true though, that a rise in median income tends to push up land values, multiply the number of goods and services, and increase the prices of the existing ones. See Boston for a prime example.

    However, it can also be said that when you live in an area that’s expensive, you generally get what you pay for in terms of culture and quality of life. Sure, it’s cheap as hell to live in Texas, but that’s because, well, it’s Texas.

  3. But where does the cost of living come into play? I know it’s pretty expensive to live in the Northeast, where you have to pay hundreds each month for half the year to not freeze, and housing prices are high. I would assume that a higher cost-of-living pushes more spouses into employment. It really doesn’t matter how ’employed’ your state is if it’s because they need two incomes just to make ends meet.

  4. Rhode Island also has a lot of self-employed artists, who don’t figure into unemployment stats when they’re not working. Not sure how much that would impact actual numbers, though.

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