I keep reading these stories about how great the Nebraska economy is and how low the unemployment rate is low compared to other states, but based on what I am seeing and hearing in my office these days I have a hard time believing the news. Yet, they keep reporting the Nebraska unemployment rate at 4.5% while the average rate for the county is 9.3%. Nevada leads the nation’s unemployment rate at 13.6%.
According to Mary Engel in her MSN Money article, the U.S. Bureau of Labor Statistics also tracks a broader measure of the nation’s real unemployment rate called the U-6 rate. This rate is also includes the “total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.” In other words, it includes those who have stopped looking for work, those marginally employed in part-time jobs, and those short-term contract workers without benefits.
The U-6 unemployment rate does not include those workers who are marginally self-employed, and if those workers were included the true unemployment rate would be even higher, perhaps as much as 3 to 4 percent higher.
Nebraska’s U-6 Unemployment Rate for the 2nd quarter of 2011 stands at 8.4% while the U.S. rate is at 16.3%. If you factor in another 4% for marginalized self-employed workers, then the true rate of misery is closer to 12% in Nebraska and 20% nationwide. That figure tends to compare to what I’m seeing with clients today.