Bad News From Those Good Unemployment Numbers: 100 Million Americans Over the Age of 16 That Are Not Working

Townhall.com:

Wow, did you see the new jobs numbers? Unemployment is down to 5.1%. In the current definition of full employment (during the 1960’s it was a 4% unemployment rate) we are getting near that point. In fact, the unemployment rate is now lower than it was anytime during the Reagan presidency. We have had 67 consecutive months of job growth. The unemployment rate has dropped almost 5% from the high point of the Obama administration in October 2009. With all this good news why are things so bad?

You may have heard something about a controversy regarding the unemployment numbers. There is focus on such matters as underemployment which for example having someone with a college degree waiting tables or bartending for lack of any quality opportunities for a person with their educational qualifications. Or you may have heard about the many people working part-time jobs due to lack of full-time opportunities or employers attempting to circumvent the rules established by Obamacare which states that a full-time employee reaches that status at 30 hours per week.

What we really need to spotlight is the crushing economic effect of a lower labor participation rate (LPR). There are now 100 million Americans over the age of 16 that are not working. The Obama Administration keeps running out the deceit that this is because of all the baby boomers retiring. The fact is that the labor force participation rate for the age group 16 to 24 is only 55.1%. That is a reduction of over 10% from 66% during the 1990’s. It is also down over 5% (60.8%) from 2005. Sure myopic minimum wage increases are harming the employment of this age group with the least work experience, but that is not the total explanation.

The Obama manipulation gets worse because the LPR is lower for the prime working years of 25-54 years old. In 2000 the LPR for this age group was almost 85%. It was down to 83% when the recession started, but has now plummeted to 80.7%. It is clear the baby boomers are not the only source of reduction in the LPR.

You may wonder why this is such a big deal. The LPR for September 2015 was 62.4%. That is 3.7% less than August, 2005 exactly ten years earlier. One can argue this reduction in rate has to do with the “Great Recession.” Not true. If you review the Dept. of Labor statistics you see virtually unstopped monthly decline in the LPR during the entire Obama Presidency. From the point that the recession was pronounced over the LPR has steadily declined by 3.3%.

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