Washington State faces higher labor underutilization than U.S. in 2023

According to new data from the U.S. Bureau of Labor Statistics, Washington State experienced significantly higher rates of labor underutilization compared to the national average in 2023. The broadest measure, known as U-6, stood at 8.1% in Washington, well above the 6.9% rate for the entire United States. This made Washington one of just a handful of states exceeding the national level on this metric.

The U-6 rate includes not only the officially unemployed based on the traditional definition, but also workers employed part-time for economic reasons and those marginally attached to the workforce. While Washington's official unemployment rate was similar to the country as a whole, these broader measures revealed many more state residents facing employment challenges last year.

Using the official U-3 definition, there were an estimated 167,500 unemployed individuals in Washington in 2023, representing 4.1% of the labor force, on par with national figures. However, the state had 119,900 additional workers classified as employed part-time involuntarily due to business conditions or an inability to find full-time roles. Another 42,700 were marginally attached, meaning they wanted jobs but had not actively searched in the past month, including 11,200 discouraged workers.

Washington had the third-largest gap nationally between its U-5 and U-6 rates at 3.0 percentage points, reflecting a high degree of underemployment from part-time workers preferring full-time work. Though five of the six measures did not differ statistically from 2022 levels, the consistently elevated rates compared to the U.S. suggest more state residents faced employment hurdles overall.

Only a few other states, like California and New Jersey, had similarly high readings across all six labor underutilization measures. Over a dozen states exhibited rates significantly below national averages. Continuing to track these measures is important for understanding the remaining slack in the job market beyond the standard unemployment rate as the economy evolves.