Por Algernon Austin
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Photo by Jean-Philippe Delberghe |
Although there are signs that the labor market is weakening, we continue to be in a period of low unemployment. While the national unemployment rate is a very useful macroeconomic indicator, it can hide a significant amount of joblessness. For example, in July 2026, the national unemployment rate was 4.1 percent, and there were 6.9 million people officially counted as unemployed. But there were another 5.9 million who did not have a job and wanted to work but did not meet the technical requirements to be counted as unemployed. Additionally, there were4.8 million people who wanted to work full-time but who could only find part-time work. Totaling these three groups, in July there were 17.6 million people who wanted a job or more work hours. This number is two and a half times the official unemployment count.
The employment-to-population ratio, or employment rate, is another useful labor market measure. It shows the percent of the population that is working. Because of the technicalities of the unemployment rate, it can significantly undercount joblessness — ironically, particularly for the populations with the most difficulties finding work. States with a relatively high rate of joblessness can have a similar unemployment rate as states with a low rate of joblessness because of this problem.1 This problem is avoided with the employment rate because with the employment rate the jobless are simply those who are not working.
For the prime-age or population (25 to 54 years old), ideally 80 percent or more of the population should be employed. The American Community Survey data for 2024 – the most recent available – indicate a national average of 82.2 percent of the prime-age population working. This is a good national employment rate.
But it is important to understand that the national average data can hide a significant amount of variation at the state and local level. Figure 1 shows that in 2024 the prime-age employment rate ranged from a low of 77.2 percent in West Virginia to a high of 87.7 percent in South Dakota, a large difference of 10.5 percentage points. While most states had prime-age employment rates above 80 percent, Alabama (78.1 percent), Alaska (79.7 percent), Arkansas (79.1 percent), Kentucky (78.8 percent), Louisiana (78.6 percent), Mississippi (78.8 percent), New Mexico (77.3 percent), Oklahoma (78.8 percent), and West Virginia (77.2 percent) all had employment rates below 80 percent.
Just as national level data can hide variation at the state level, state level data can hide variation for subpopulations within the state. There are long-standing disparities in unemployment rates for racial and ethnic minority groups. These unemployment rates significantly undercount Black joblessness, but they nonetheless illustrate that there is a need for more jobs for these groups. Figures 2and 3 show the four highest state unemployment rates for Hispanic and Black people in the second quarter of 2026. Although the national unemployment rate was 4.3 percent in the second quarter, the Hispanic and Black rates in the selected states are all significantly higher. Also, in all of the selected states, the overall and White state unemployment rates are much lower than the rate for the Hispanic and Black populations. For example, in Pennsylvania, the Hispanic unemployment rate is 8.1 percent, but the overall rate is 4.2 percent and the White rate is 3.3 percent. In Michigan, the Black unemployment rate is 11.4 percent, but the overall rate is 5.0 percent and the White rate is 3.8 percent.
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As I discussed in CEPRs Majority Agenda brief, “Provide Jobs for Those Who Need Them,” a majority of Republican, independent, and Democratic voters all support a federal job guarantee. The federal government should be directly creating jobs and providing subsidies and economic incentives to boost job creation for the states and subpopulations experiencing high rates of joblessness. Doing this would be much more useful to average Americans than spending billions on an unnecessary war and on increasing spending on the US military. The Trump administration has requested that the Pentagon’s budget be increased by more than half a trillion dollars, an increase of more than 50 percent.
There are many types of work that could benefit from federal investment and incentives. For example, the construction industry is facing a shortage of workerswhich will be exacerbated as a large share of construction workers retire in the coming years. A shortage of construction workers contributes to higher housing costs. Since women and Black and Asian American men are underrepresented in construction occupations, applying a diversity, equity, and inclusion lens to increasing the construction workforce is a smart way to address the shortage and to help reduce housing costs.
Another area that could benefit from federal investment and incentives is the care economy. The Center Forward think tank reports:
In 2023, 1.8 million vacancies existed in care professions, while demand for caregiving services continued to rise due to several factors, including an aging population and the rising number of people with chronic illnesses. Currently, 56% of U.S. workers have care responsibilities outside their full-time jobs. However, this demand also strains caregivers, requiring them to work increasingly long hours and provide more intensive care. Consequently, the direct care workforce faces a substantial turnover rate, with estimates ranging from 40% to 60%. This means that approximately half of the workforce leaves their jobs each year, further exacerbating the shortage.
This is a serious and worsening crisis that requires an increase in wages, training, and recruitment for care workers.
Climate change is increasing the number and intensity of wildfires and floods. Proper forest and land management can help mitigate these problems. Our native forests are being stifled by invasive species. As the temperature rises, urban spaces need more greenery and parks to help cool heat islands. A program like the Biden administration’s American Climate Corps could put many thousands of young people to work addressing all of these problems and more. Unfortunately, the Trump Administration cancelled the program (and it also appears to have deleted the official Biden government page on the program).
The low national unemployment rate hides the high rate of joblessness in some states and among some subpopulations. We need more construction workers, more care workers, and more climate workers. These are only three of several areas where there is a lot of urgent work that needs to be done. The federal government should make investments to develop the workforce and the jobs to tackle these and other pressing problems.
Notes.
1) For example, West Virginia has a similar American Community Survey prime-age unemployment rate as New York and Illinois, although it has a much lower employment rate than those states.
First published by CEPR.
Algernon Austin, a senior research fellow at the Center for Economic and Policy Research, has conducted research and writing on issues of race and racial inequality for over 20 years. His primary focus has been on the intersection of race and the economy.
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