Six years ago, in June 2009, we were told the Great Recession had ended and recovery had begun. So by now, you should be able to feel that recovery like the scalding August sun on your skin, right?
If you live in Nevada and are looking for full-time employment, you probably don’t need sunscreen.
The U.S. Bureau of Labor Statistics’ latest U-3 numbers — the official unemployment rate — create the perception that things aren’t so bad here. The national U-3 rate is 5.3 percent, and Nevada’s is 6.9 percent. But true unemployment is measured by the U-6 rate, which counts not only the unemployed, but the underemployed — those working part-time because they can’t find full-time work — and discouraged workers who have stopped actively seeking a job.
Nationally, that number is 11.3 percent. In Nevada, it was an eye-popping 15.2 percent from the third quarter of 2014 through the second quarter of this year. The difference between the national and Nevada U-6 numbers is more than double the difference between the U-3 rates. In fact, Nevada has the worst U-6 rate in the country, with California the next closest at 14.0 percent.
Companies in the Silver State are hiring again, and clearly we are through the worst of the economic downturn. But it’s telling on at least two fronts that a sizable segment of the Nevada workforce can’t find full-time work.
First, it’s a sign that this is an even weaker recovery than we thought. As reported by The Wall Street Journal’s Kate Davidson, U.S. gross domestic product grew at a meager 1.5 percent in the first half of 2015, coming off an almost equally weak average of 2 percent annually from 2012 to 2014, down 0.3 percentage points from previous estimates. The first quarter of this year saw GDP growth of just 0.6 percent after an upward revision from 0.2 percent contraction.
Second, it shows the high cost of creating full-time jobs, especially with the Affordable Care Act mandates hanging over employers’ heads. Obamacare has made it punitive for businesses to maintain current full-time jobs or consider adding more such posts, while promoting the perverse incentive of keeping employees under 30 hours per week.
The U-6 number is a reminder that businesses and workers are not bottomless wells that can be tapped again and again. If elected officials are serious about improving their communities and putting people back to work, they’ll keep that in mind and enact more policies that support investment and economic growth, and turn away from taxes and regulations that stifle full-time employment.