New data show that 14.9 percent of the workforce was unemployed at some point in 2011, much higher than the official 2011 unemployment rate of 8.9 percent. How can this be? Each month, the official unemployment rate provides the share of the labor force unemployed in that month. But this understates the number of people who are unemployed at some point over a longer period, since someone who is employed in one month may become unemployed the next, and vice versa. So the official annual unemployment rate—which is actually the average monthly unemployment rate for the year—is much lower than the share of the workforce that experienced unemployment at some point during the year.
The figure below, from The State of Working America, 12th Edition(and updated with new data from the Bureau of Labor Statistics) shows both the official unemployment rate and the “over-the-year” unemployment rate—the share of workers who experienced unemployment at some point during the year. Using the ratio of the over-the-year unemployment rate to the official unemployment rate in 2011, we can project the over-the-year unemployment rate for 2012 and 2013. It is likely that 13.1 percent of the workforce, or more than one in eight workers, will be unemployed at some point next year.