“Jobless” Numbers

This is annoying.

People receive 26 weeks of unemployment assistance, and then nothing. After 26 weeks, there is no point to reporting employment status — you get nothing for the effort.

However, if you don’t report, you are counted as having a job.

That’s  how the unemployment rate in the US is calculated. That’s how we can have a record low unemployment rate and poor levels of job creation at the same time.

And that’s ignoring the problem of the under-employed — the people who go from full time jobs at good salaries to part-time as a Walmart cashier.

That’s why you can have low “unemployment” and largely stagnant wages.

Under the Obama administration, creation of 300,000 jobs per month was seen by financial analysts as the requirement for economic growth. The latest number now is 134,000.  That’s recession territory.

Of course, one of the key issues is training. Most of those who are unemployed lack the training for the jobs that exist, and can’t afford to pay for training.

The better economic indicator is Labor Force Participation Rate, but neither the US government nor the media seem to want to talk about that.(1)

There’s a reason, as the chart of this rate from 1998 shows(2):

There was growth in the participation rate in the 1990s as wages failed to keep up with the costs of living, and especially housing, education and healthcare.(3) The decline since is largely involuntary.

Brookings does see a rebound in labor force participation among those in the “prime working age” of 25-54. That rebound started in 2015. However, it hasn’t gone very far, and its affected by changes in immigration in that age group as well as the decline in the size of that age group as a proportion of the US population.


Sources:

  1. https://economictimes.indiatimes.com/definition/labour-force-participation-rate
  2. https://data.bls.gov/timeseries/LNS11300000
  3. https://fred.stlouisfed.org/series/CIVPART

 

 

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