We’ve already started to hear this lie: the US is at full employment. That nearly everyone who wants a job has got a job. The lie started during President Obama’s second term, when the job market was truly lousy. And now that President Trump is in charge, the lie is again coming out of the mouths of economists. Let me be clear about something. Parts of the US economy are doing better than they were post-recession. Other parts haven’t even gotten back to their pre-Great Recession levels. And, if you believe Trump, the economy will do much better now that changes have been made to the tax system. I’ll believe that when I see it.
The job market is the trickiest part of the economy to get a handle on. The unemployment rate in the US is down to 4.1 percent, which is less than half of what it was during the worst of the Great Recession of 2009.
So, yes, that’s better. A lot better.
If you’ve been following this column for any length of time you already know the failings of the survey that comes up with the unemployment rate. The safeguards against false reporting are almost nonexistent.
You also know that the real unemployment rate – the one that includes people who have become too discouraged to even look for a job – is still at a lofty 8.1 percent.
But there’s another inconvenient number that the government produces that shows that the job market isn’t as healthy as whatever party that occupies the White House would have you believe. This figure is
called the Labor Force Participation Rate and, as of last Friday’s most recent employment report, it stood at just 60.1 percent. This refers to the number of people who are employed or actively looking for work as a percentage of the US population that’s old enough to be employed.
To put it in perspective, this figure dipped slightly below 59 percent for a time after the Great Recession and has bounced back to where it is now. But it’s still significantly below the 64 percent level achieved at the turn of this century and is sharply lower than the 63 percent reached prior to the Great Recession.
It could be that a lot of Americans have suddenly decided that they don’t want to work or don’t need to work. That, in fact, is exactly how the Labor Department – in a September 2016 report titled, “Labor Force Participation: What has happened since the peak?” – has rationalized this inconvenient figure.
“The labor force participation rate of men 25 to 54 years old continued its long-term decline,” said one part of that report. Less-educated men are working less than guys with better educations.
Published in Daily Times, January 15th 2018.