Unemployment - Underemployment

January’s unemployment rate in Napa County was 11.1%, up from a December 10.2%, and above the year-ago 8.2%. This compares with an unadjusted unemployment rate of 13.2% for California and 10.6% for the nation during the same period. This placed Napa County 10th best of the 58 counties in California, a change from its historical 4th or 5th best place.

We are also finally beginning to read more of the underemployment figures – though the BLS has been tracking this rate for over 15 years. February’s national underemployment was 16.8% up from 16.3% in January. Underemployment includes three classifications of persons - unemployed workers who are actively looking for work, involuntarily part-time workers who want full-time work but have had to settle for part-time hours, and marginally attached workers who want and are available for a job, but are not actively looking. Together, they provide a more comprehensive measure of slack in the labor market.

As unemployment is a lagging indicator, underemployment is probably even more of a lagging indicator – due to those in the above definition. This rate is also somewhat nebulous, is it is difficult to quantify. A recent Gallop poll has underemployment at about 20% - that means over 30 million Americans.

The underemployed tend to spend much less than their fully employed colleagues – 35 percent less, according to Gallup. This potentially costs the economy hundreds of millions of dollars every month. Using the 20% figure - an economy where 1 in 5 are underemployed and take one-fifth of spenders out of the economy: That has huge implications in terms of our ability to mount any kind of consumer recovery. Our economy is so dependent on consumer spending that until people get back out there buying, you won’t see things improve.

So how long until things improve? Anyone’s guess at this point – but for sure it will continue to be slow.