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Tuesday, June 14, 2011

Michigan's employment under-utlilization 'U-6" rate, stands at 20.3%

Felischa Booker, former AIG, MilwaukeeImage by wisaflcio via Flickr
Michigan's under-utilization rate, which
measures either discouraged workers or
those seeking full time work but employed
part-time, stands at 20.3%
As Michigan official jobless rate registered at 10.2% with latest labor market data cited by the Department of Technology, Management and Budget (MDTMB), if the under-utilization rate was counted, the states' actually unemployment rate would more than 20%.

Known as the U-6 unemployment rate, this data statistic measures both discouraged workers who have gave up looking for employment, along with individuals working part-time but desire full-time work opportunities. 

Michigan's under-utilization rate, according to the U.S. Bureau of Labor Statistics (BLS) was 20.3%, from the July 2010-March 2011. This high rate of underemployment or discouraged workers have resulted in one out of five people that would like to work full time but, cannot find up to 40 hours per week employment.

In turn Michigan's overall economic situation, as a result of an high U-6 rate, is being impacted corporations sitting on money available to hire full time employees but, aren't deciding to do so.

Charles Ballard, a professor of economics at Michigan State University, cited to the Detroit Free Press, that Michigan and the nation employment recovery, won't enjoy a V-shaped rebound like they did after the early-1980s recession.
He sees the recovery taking a U-shaped path, with a long, flat bottom. "Corporations are sitting on trillions. Banks are sitting on trillions," Ballard said. "The money is not moving."
For the nations' and Michigan's economy to return to full employment, like during the second half of President Bill Clinton administration in late 1990's when the jobless rate was below 5.0%, up to 21 million jobs would need to be created, cites a McKinsey Global Institute most optimistic study in June 2011.

In contrast, in McKinsey’s least optimistic scenario, the U.S. economy would add only 9.3 million jobs by 2020, leaving joblessness nearly untouched from today, of 9%. The BLS noted on Friday, June 3rd that the U.S. unemployment rate increased to 9.1% or one out of six Americans seeking work

To make a much-needed dent in joblessness in the U.S., McKinsey's Institute study noted four ways both individual states like Michigan and federal labor policy to review.

Policies impacting labor must start with: "Addressing the growing skill mismatch problem; finding ways to make globalization a better source of job creation in the United States; stimulating innovation and new company creation; and simplifying regulatory procedures that create obstacles to job creation.
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