A big puzzle looms over the U.S. economy: Friday’s jobs report tells us that the unemployment rate has fallen to 6.7% from a peak of 10% at the height of the Great Recession. But at the same time, only 63.2% of Americans 16 or older are participating in the labor force, which, while up a bit in March, is down substantially since 2000. As recently as the late 1990s, the U.S. was a nation in which employment, job creation and labor force participation went hand in hand. That is no longer the case.
What’s going on? Think of the labor market as a spring bash you’ve been throwing with great success for many years. You’ve sent out the invitations again, but this time the response is much less enthusiastic than at the same point in previous years.
One possibility is that you just need to beat the bushes more, using reminders of past fun as “stimulus” to get people’s attention. Another possibility is that interest has shifted away from your big party to other activities.
Economists are sorting out which of these scenarios best explains the slack numbers on labor-force participation….
The problem is the economy is only operating at about half the level it was before the Depression started in 2007-08. Certainly that is the case here. That is now the “new normal,” and why new jobs are only about half of what they were then. A lot of people have just given up and dropped out of the workforce.
Not to mention those of us who are now “under-employed,” accepting part-time work outside of our education/experience, just so we can pay some of our bills and perhaps have some benefits.
We are still around except that many of us are considered long term unemployed and hence absolutely would not be considered for any job in our field or not.
This Thursday, a former parishioner and still good friend will close her business after struggling mightily for the last 7 years to stay afloat. Two full time and 4 part time jobs will disappear that day. Her 8 years of business before the collapse had been great.
None of the lofty hot-air rhetoric from Washington DC has been of any help to these hard working folks. The seeds of their demise are not complicated: customers struggling economically either did not pay their bills or sought cheaper foreign made goods because of their dire straights. Costs [both personal and business] rising relentlessly; especially healthcare.
Now their new path forward is to look for jobs; but, they are already finding out that they TOO are considered long term employed since they have not “officially” worked for any company in a long time.
Way too many people have forgotten or never known the late 1980’s: hard to believe, but the major economic worry of those days was not having ENOUGH workers in the labor force to meet the exploding demand for workers.