Unemployment rate by industry, state, education, gender, metropolitan city

Unemployment Rate is an important measure of the health of an economy, its growth, and the success of a country’s economic initiatives. A zero unemployment rate is not technically possible but a low rate is highly desirable because higher job creation has been positively associated with greater satisfaction, innovation, lowered crime rates and progress across every other developmental indicator.

The unemployment rate has one drawback that is being a lagging indicator, it shows joblessness after economic events causing layoffs have already occurred. Conversely, it will show increased job growth after the economy is in the expansion phase. Therefore this indicator should be analyzed along with other ones for the clearest picture.

That being said there are various ways to look at the unemployment rate sectionally to obtain information that helps make important policy decisions. Most of these specific subsets of unemployment rate data show the same trends as the overall unemployment rate due to the interrelationship between all the sectors of the economy. However, they facilitate comparison to help choose priority areas for intervention.

Commonly Used Perspectives Of Unemployment Rate

Unemployment Rate By State : States vary in size geographically and economically and therefore they will all have different unemployment rates. Some common reasons for states having a strong economy and consequentially, low unemployment are:

• Diverse contributing sectors

• Skilled workforce

• Tourism and favorable tax regimes

• High availability of natural resources

• Warehousing or manufacturing hubs

It is also possible for states to have all these factors and still have high joblessness. It all depends on execution of policies. The unemployment rate by state helps the federal government to allocate resources based on need.

Unemployment Rate By Industry : When the economic cycles enter the bust phase as happened recently, not all industries are uniformly affected in terms of job contraction. This occurrence is also seen over many years of structural changes in an economy that result in prosperity for some sectors and stagnation for others. Common reasons for varying unemployment rates by industry include:

• Natural transition from an agricultural economy to manufacturing and then service based with development

• Innovation boom in knowledge economies which drive growth in the service sector

• Exhaustion of natural resources leading to a decline in sectors like mining, oil, and gas, tourism, etc.

• Oversaturation of labor supply in some previously significant sectors

An overview of the rates in various industries can help in making decisions about the professions that are likely to remain employment generators.

Unemployment rate by Gender : The unemployment rate by gender continues to show a gap between male and female genders. Generally, the male unemployment rate is higher than the female unemployment rate though this gap has shrunk over the years. Some of the common causes for these differences include:

• Unequal access to job market, biases perpetuating against one gender

• The bulk of childcare and household responsibilities falling upon women leading them to opt for lower-paying jobs if not opting out of the workforce

The male and female unemployment rates also show gap patterns across states that correlate with the predominance of certain industries and cultural biases. Over the years it has also been observed that the male labor force participation rates have been dropping.

Unemployment Rate By Metropolitan Area : The metropolitan areas tend to have unemployment rates as per the strength of their economies. The common reasons that cause a metropolitan area to have a low unemployment rate include:

• A diverse economy that also has a strong agricultural base

• Historical importance

• Seat of government

• Favorable policy regimes for stimulating business growth

A few metropolitan areas have declined in importance over time as their primary industries have gone bust. Sometimes firms may relocate overseas to cut costs as well, leading to job scarcity. The unemployment rate by metropolitan area is a good indicator of the health of a local economy.

Unemployment Rate By Education : The unemployment rate by education is generally measured separately for high school diploma holders, dropouts, associate degree holders, and graduates. A higher degree generally correlates with lower unemployment however, there are many sectors where associate degree holders also perform well. Those with only high school education tend to remain in entry-level low-skilled jobs especially in early life.

The unemployment rate is measured as the percentage of the unemployed as part of the total population. Therefore, to account for reasons of voluntary unemployment, quality of jobs etc. the surveys that gather the data must be adequately designed. The US generally measures U3-U6 unemployment rates to ensure that people who have stopped searching for work due to qualitative factors are not excluded.

Generally, the unemployment rate values quoted everywhere are the U-3 unemployment rates that only count those actively looking for jobs.