In the 30 months since the recession officially ended, nearly 1 million people have dropped out of the labor force they aren't working, and they aren't looking according to data from Labor's Bureau of Labor Statistics. In the past two months, the labor force shrank by 170,000.
This is virtually unprecedented in past economic recoveries, at least since the BLS has kept detailed records. In the past nine recoveries, the labor force had climbed an average 3.5 million by this point, according to an IBD analysis of the BLS data.
"Given weak job prospects, many would-be workers dropped out of (or never entered) the labor force," noted Heidi Shierholz of the Economic Policy Institute in her analysis of the BLS jobs report issued last Friday. "That reduces the measured unemployment rate but does not represent real improvement."
According to the BLS, the "labor force participation rate" the ratio of the number of people either working or looking for work compared with the entire working-age population is now 64%, down from 65.7% when the recession ended in June 2009. That's the lowest level since women began entering the workforce in far greater numbers several decades ago.
If you adjust for this drop, the unemployment rate would be close to 11%, instead of the official 8.5%.
Long-Term Economic Impact
Not only does the shrunken labor force mask the real size of the unemployment problem in the country since only those actively looking for work are counted as unemployed it likely means that economic growth will be subpar going forward.
"The fall in the labor force participation rate leads us to mark down the long-term potential output growth path of the American economy," University of California-Berkeley economist Brad DeLong wrote on his blog last month. "It is harder to pull people into employment if they are out of the labor force than if they are in the labor force and unemployed."
The weak job market has also helped depress wages. Real median annual household income has dropped 5.1% since the recession ended, more than the 3.2% decline during the recession itself according to a new Sentier Research report.
The smaller labor force is just one of the problems with the current unemployment number. The other is that the jobs being created aren't keeping pace with population growth. Since June 2009, the economy has added 1.4 million jobs, which is below the more than 2 million needed to keep up with population growth and far below the gains experienced at the same point in the previous 10 recoveries which saw job gains average more than 4 million.
Historic Jobs Recession
Payrolls are still 6.1 million below their January 2008 peak. After January, the current jobs recession will be the longest since the Great Depression.
The Economic Policy Institute calculates that when you add the number of jobs lost in the recession and the growth in the working age population over the past few years, the "jobs deficit," as EPI calls it, "remains well over 10 million."
There's also the problem of people who want full-time work not being able to find it. The BLS offers a different unemployment measure that counts not only those currently looking for a job, but those who've given up looking, as well as those who are underemployed because of the soft job market.
That measure has unemployment at a whopping 15.2%.
Obama has flooded the country with illegals,and stifled business with regulations,effectively destroying the job market.....
This is virtually unprecedented in past economic recoveries, at least since the BLS has kept detailed records. In the past nine recoveries, the labor force had climbed an average 3.5 million by this point, according to an IBD analysis of the BLS data.
"Given weak job prospects, many would-be workers dropped out of (or never entered) the labor force," noted Heidi Shierholz of the Economic Policy Institute in her analysis of the BLS jobs report issued last Friday. "That reduces the measured unemployment rate but does not represent real improvement."
According to the BLS, the "labor force participation rate" the ratio of the number of people either working or looking for work compared with the entire working-age population is now 64%, down from 65.7% when the recession ended in June 2009. That's the lowest level since women began entering the workforce in far greater numbers several decades ago.
If you adjust for this drop, the unemployment rate would be close to 11%, instead of the official 8.5%.
Long-Term Economic Impact
Not only does the shrunken labor force mask the real size of the unemployment problem in the country since only those actively looking for work are counted as unemployed it likely means that economic growth will be subpar going forward.
"The fall in the labor force participation rate leads us to mark down the long-term potential output growth path of the American economy," University of California-Berkeley economist Brad DeLong wrote on his blog last month. "It is harder to pull people into employment if they are out of the labor force than if they are in the labor force and unemployed."
The weak job market has also helped depress wages. Real median annual household income has dropped 5.1% since the recession ended, more than the 3.2% decline during the recession itself according to a new Sentier Research report.
The smaller labor force is just one of the problems with the current unemployment number. The other is that the jobs being created aren't keeping pace with population growth. Since June 2009, the economy has added 1.4 million jobs, which is below the more than 2 million needed to keep up with population growth and far below the gains experienced at the same point in the previous 10 recoveries which saw job gains average more than 4 million.
Historic Jobs Recession
Payrolls are still 6.1 million below their January 2008 peak. After January, the current jobs recession will be the longest since the Great Depression.
The Economic Policy Institute calculates that when you add the number of jobs lost in the recession and the growth in the working age population over the past few years, the "jobs deficit," as EPI calls it, "remains well over 10 million."
There's also the problem of people who want full-time work not being able to find it. The BLS offers a different unemployment measure that counts not only those currently looking for a job, but those who've given up looking, as well as those who are underemployed because of the soft job market.
That measure has unemployment at a whopping 15.2%.
Obama has flooded the country with illegals,and stifled business with regulations,effectively destroying the job market.....
