This CNBC article purports to show how complicated it can be to try to figure out what job numbers mean. Much of it depends on how many left the labor force “voluntarily” and how many would like to look for a job if they thought there was any chance of success in doing so.
The article shows that the official unemployment rate is a rather meaningless figure. It leaves out many unemployed people because they are not officially looking for work.
Shierholz estimates that there are currently more than 5 million missing workers who are not included in the unemployment rate because they are neither working nor looking for work, but who might be if the job market were stronger.
She bases her estimate on a comparison of employment projections before the Great Recession to the actual situation now.
Some economists agree with her.
“It’s pretty clear in my mind that these people are missing from the labor force,” said Dean Baker, co-director of the Center for Economic and Policy Research, a left-leaning think tank.
He said that’s because there have been significant losses among so-called “prime age workers.” These are workers who are between age 25 and 54, and therefore are likely too old to be in college and too young to retire.
The labor force participation rate for prime-age workers fell from about 83 percent in March 2007 to about 81 percent last month, according to the Bureau of Labor Statistics.
“These people just didn’t decide to drop out of the labor market,” Baker said.
Of course, as with all economic claims, there are others who see it differently. Some insist that people dropped out of the labor force because they wanted to retire, not because they couldn’t find a job.
While economists come up with endlessly subtle arguments to make the low labor participation rate good news, I have a hard time believing that so many people “just happened” to retire right after the economy blew up. I think it is far more likely that many of these people would rather have a job but they have given up on looking for one at the moment.
Just one more special feature of the Obama Economy!