Workers help build the now-open Cheddar’s Casual Cafe at the El Con Mall, 3455 E. Broadway. A drop in construction jobs here has contributed to a high underemployment rate, recent figures show. Only two states, California and Nevada, have higher underemployment rates than Arizona.

Arizona Daily Star 2014

PHOENIX — Arizona’s declining official unemployment rate is hiding a darker secret in the state economy: a high number of people who want but can’t get full-time jobs.

A new report from the federal Bureau of Labor Statistics shows that a key labor indicator puts the total unemployed and underemployed in Arizona last year at 14.7 percent. That’s more than double the official 7 percent 2014 jobless rate for the state.

Potentially more significant, that compares with a 12 percent national figure. And only two states — California and Nevada — fared worse.

Part of the difference is what the federal government describes as people “marginally attached to the labor force.” That includes people who say they want work but have not looked for a job recently.

But the big jump from the official unemployment rate is the large number of Arizonans who are employed part-time but actually want full-time jobs. That includes both those whose hours were cut back because of business conditions and those who simply are unable to find full-time employment.

The Bureau of Labor Statistics figures there were 189,700 Arizonans who fit that category, on top of the 216,000 state residents who are officially listed as unemployed because they are currently jobless and actively seeking work.

Nationwide, there were 7.2 million people working part time for economic reasons last year.

North Dakota, with an oil shale boom, had the lowest rate of unemployment last year at 0.8 percent. Even after adding underemployment, the combined rate reached only 5.4 percent.

The “why” behind the high numbers in Arizona is a bit harder to discern.

It’s a reflection of the fact that the state’s recovery has been slow, said Aruna Murthy, director of economic analysis for the state Department of Administration.

Nationwide, she said, there are more people working now than before the recession. But in Arizona the figure is only about 75 percent of peak employment.

At the same time, Murthy said, the jobs that are being created are in low-wage industries — and, more to the point, industries that tend to hire people on a part-time basis.

That particularly includes leisure and hospitality, mostly jobs at bars, restaurants and hotels.

Economist Dennis Hoffman of the W.P. Carey School of Business at Arizona State University also sees the high growth of people in part-time positions as related to the kind of jobs being created. But Hoffman said the reasons for that are more complex

During the real-estate boom of the early part of the century, there were plenty of good-paying, growth-related jobs available in Arizona, he said. Construction employment, for example, made up one out of every 11 jobs in the state.

The result, Hoffman said, is that many young people figured they didn’t need a higher education to do well financially.

“Guess what: They’re now 30, 35,” he said. And half of the construction jobs Arizona had at its peak are gone.

“They don’t have any skills,” Hoffman said.

“They’re challenged in this labor market because it’s not a population-growth labor market anymore,” he continued. “It’s a skills-demanding labor market and they didn’t choose to invest in skills because it didn’t make sense to them at the time.”

So what that leaves, Hoffman said, are those low-wage, part-time jobs.

He said that same construction boom-to-bust is why California and Nevada also are recording the same high percentage of part-timers who want full-time work.

About the only bit of good news out of the federal report is that the 14.7 percent total real unemployment and underemployment is 1.3 percentage points lower than it was a year earlier. But the national decline was even steeper at 1.8 points.

Follow Howard Fischer on Twitter: @azcapmedia