Every month, the U.S. Department of Labor announces the official unemployment figures. On Friday, it reported that the unemployment rate rose from 8.2% to 8.3%, and immediately the news captured the headlines. Politicians from both major U.S. parties began spinning the figures for their own political gain.

Read: The States With the Least Full-time Work

While the unemployment rate is the statistic most talked about in the media, it does not give a full picture of the employment situation in this country. In order to be unemployed, one must be out of work and have actively searched for a job within the past four weeks. Some people who have not been able to find jobs have dropped out of the labor force altogether. Others are considered “marginally attached” to the labor force, meaning they have looked for a job within the past year, but not actively in the past four weeks.

Finally, there are many people who are working part-time but would prefer full-time work. All of the people in these situations are part of a state’s underemployment rate. The underemployment rate in this country from the third quarter of 2011 to the second quarter of 2012 is 15.3%.

24/7 Wall St. looked at the 10 states with the highest underemployment rate. Not surprisingly, the official unemployment and underemployment rates are highly related. Four of the top five states on the list are in the top five in terms of unemployment.

The underemployment rate is also generally tied to a state’s housing market. Five of the states on this list made 24/7 Wall St.’s recent report on the 10 states with the most underwater mortgages.

Finally, income growth per capita has not been as strong in states with the highest underemployment. Three of the 10 states on the list were in the bottom 10 states for income per capita growth, with another three ranking in the bottom 20.

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When reviewing the states with highest underemployment, we considered data from the Bureau of Labor Statistics on unemployment and underemployment, as a moving average between Q3 2011 and Q2 2012, a moving average between Q2 2011 and Q1 2012, and a moving average in all of 2011. 24/7 Wall St. also looked at Bureau of Labor Statistics data on income per capita and the gross domestic product. To gauge how the housing market affects the labor force, we looked at data from CoreLogic on the percentage of houses underwater and data from Fiserv for housing price drops. We also looked at the poverty rates and percentage of people on Medicaid as of June 2012, which was provided by U.S. Census Bureau.

Here are the 10 states with the highest underemployment.

10. Arizona
>Underemployment rate: 16.6%
>Official unemployment rate: 8.7% (17th highest)
>Gross domestic product: $227.1 billion (20th highest)
>Income per capita: $35,875 (11th lowest)

The housing bust has taken a toll on Arizona, as 43.4% of houses have negative equity in them, the third-highest rate in the country. Housing prices fell a whopping 52.7% from the end of 2006 to the end of 2011, the biggest fall for any state in the U.S. except Nevada. More than 20% of the residents of the state are on Medicaid, the only state on this list to crack the top 10 in this statistic. However, underemployment is showing signs of improvement. The underemployment average for all of 2011 was 18%, where it was the sixth-highest rate in the country.

9. Washington
>Underemployment rate: 17%
>Official unemployment rate: 8.7% (16th highest)
>Gross domestic product: $310.9 billion (14th highest)
>Income per capita: $44,294 (13th highest)

Washington’s unemployment rate is solidly above the June national unemployment rate of 8.2%, and, in addition, the state has plenty of people who have become discouraged, are marginally attached or are involuntarily working part-time. In fact, barely half of all underemployed people are counted as part of the official unemployment rate, the lowest rate among all the states on this list. The underemployment rate has been improving however, as the rate was 17.8% in 2011 as a whole, and 17.6% in the average between Q2 2011 and Q1 2012. Per capita income of $44,294 is the second-highest of the states on this list.

Also Read: Ten States Where Young People Can’t Find Work

8. Florida
>Underemployment rate: 17%
>Official unemployment rate: 9.2% (11th highest)
>Gross domestic product: $661.1 billion (4th highest)
>Income per capita: $39,563 (24th lowest)

Like many of the states on this list, a bruised housing market led to the loss of jobs in the housing industry, leaving many Floridians in less than desirable employment positions. With housing prices cut nearly in half between the end of 2006 and the end of 2011, 45.1% of homes are underwater. GDP growth between 2010 and 2011 rose only 0.5%, the lowest rate on this list. The labor force out of work at least 15 weeks is 6.2%, tied for fourth highest of all states. The state has the highest percentage of people who are over 65, an age group that generally takes longer to find a new job following unemployment.

7. South Carolina
>Underemployment rate: 17%
>Official unemployment rate: 10% (4th highest)
>Gross domestic product: $143.3 billion (24th lowest)
>Income per capita: $33,673 (5th lowest)

The difference between the official unemployment rate and the underemployment rate, 7 percentage points, is the lowest difference of any state on this list. This means that the underemployed tend to be officially unemployed compared to other states. Fortunately, South Carolina’s housing market did not crash as hard as other states. Only 19% of homes are underwater, a far better percentage than places such as Nevada, Florida and Arizona. The 8.5% drop in housing prices between 2006 and 2011 was the lowest on the list. Yet with consumer spending the biggest factor in determining the strength of the economy, South Carolina’s income per capita of $33,673, the lowest on this list, may make it more difficult than other states to emerge from its economic struggles.

6. Oregon
>Underemployment rate: 17.4%
>Official unemployment rate: 9.1% (12th highest)
>Gross domestic product : $186.2 billion (25th highest)
>Income per capita: $37,909 (19th lowest)

While the unemployment rate fell slightly from the recorded rate of 9.2%, the underemployment rate has actually rose from 17.2% in the previous quarter. Oregon is the only state on this list to see an uptick in underemployment. Despite its high underemployment rate, Oregon’s economy did improve by some measures in 2011. Its 2011 gross domestic product rose by 4.7%, more than any state on this list and the second highest of all states measured. Also, the rate of people unemployed for 15 or more weeks is 4.7%, the lowest rate on this list.

5. Michigan
>Underemployment rate: 17.4%
>Official unemployment rate: 9.4% (9th highest)
>Gross domestic product: $337.4 billion (13th highest)
>Income per capita: $36,533 (14th lowest)

When the U.S. automobile industry was on the brink of collapse several years ago, Michigan’s economy went into a downward spiral. Until June 2010, Michigan had the highest unemployment in the country, reaching 15.2% in the summer of 2009. While the situation has greatly improved since hitting rock bottom three years ago, the unemployment rate is still 1.2 percentage points above the national average. However, the underemployment situation has also shown improvement recently. Last quarter, 18.1% of people were considered underemployed, which was the fourth highest at the time. The drop of 0.7 percentage points is the biggest drop in underemployment of any state on this list.

4. North Carolina
>Underemployment rate: 17.5%
>Official unemployment rate: 9.8% (5th highest)
>Gross domestic product: $385.1 billion (9th highest)
>Income per capita: $36,164 (13th lowest)

North Carolina’s income per capita between 2010 and 2011 has grown at a rate of 3.31%, the lowest of any state on this list and the third lowest overall. Like its southern companion, North Carolina’s housing market has not been as battered as other states on this list. Housing prices between the end of 2006 and 2011 tumbled only 9.6%, lower than any state on this list other than South Carolina. Meanwhile, only 14.7% of mortgages are underwater in the state, less than any other state on this list. The poverty rate for North Carolina is 17.5%, the highest on the list except for its southern neighbor.

3. Rhode Island
>Underemployment rate: 18.9%
>Official unemployment rate: 11.2% (2nd highest)
>Gross domestic product: $43.7 billion (6th lowest)
>Income per capita: $43,992 (16th highest)

Unlike neighboring states Massachusetts and Connecticut, which have underemployment rates of 13.5% and 14.5%, respectively, Rhode Island has an underemployment rate of 18.9%. The state’s heavy reliance on tourism is often considered a factor. The state has the second-highest percentage of people in the labor force who have been out of a job for more than 15 weeks, at 7%. Rhode Island is the only state where the underemployment rate for the end 2011, at 18.6%, was actually lower than the current moving average.

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2. California
>Underemployment rate: 20.3%
>Official unemployment rate: 11.2% (3rd highest)
>Gross domestic product: $1,735.4 billion (highest)
>Income per capita: $44,481 (12th highest)

California is one of only two states where more than a fifth of the labor force is underemployed. The state has the highest difference between the U6 and U5 percentage rates, indicating there are a higher percentage of people involuntarily working part-time than in any other state in the U.S. California has the sixth-highest percentage of homes underwater for all states, at 30.5%, and the 46.7% change in home prices between the end of 2006 and 2011 is the fourth-largest drop. Higher incomes could help boost consumer spending in the future, perhaps helping to bring down the underemployment rate. Income per capita for the state is $44,481, the highest of all of the states on this list.

1. Nevada
>Underemployment rate: 22.1%
>Official unemployment rate: 12.3% (highest)
>Gross domestic product: $112.5 billion (19th lowest)
>Income per capita: $38,173 (21st lowest)

Nevada’s highest-in-the-country unemployment rate does not provide an accurate portrayal of the job situation, as the underemployment rate is almost 10 percentage points higher than the official rate. The housing market has pummeled Nevada’s economy. Between the end of 2006 and end of 2011, housing values tumbled 59.9%, the sharpest decline of all 50 states. Now a whopping 61.2% of houses are underwater, the highest in the U.S. by more than 16 percentage points. As housing prices tanked, underemployment grew. The rate of job losers and people who have completed temporary jobs is 7.7%, higher than any state measured. Even as underemployment is falling, incomes are not rising particularly fast. Income per capita rose only 3.34% from 2010 to 2011, the second-lowest rate on this list, after North Carolina, and the fourth lowest overall.

-Samuel Weigley

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