Research

The Missing Worker

Over 3 Million Unemployed Workers Have Called It Quits Due To Obamanomics

The Missing Worker

AMERICA’S MISSING WORKERS HAVE BEEN DRIVEN OUT OF THE LABOR FORCE BY THREE YEARS OF OBAMA’S FAILED POLICIES

The Economy Remains In “By Far The Worst Jobs Recovery Since The Great Depression.” “Even with the recent gains, this is also by far the worst jobs recovery since the Great Depression, and the U.S. still has about 5.5 million fewer jobs than it did before the recession began in December 2007.” (Editorial, “The January Jobs Thaw,” The Wall Street Journal, 2/4/12)

 “There Are Currently Over 3 Million ‘Missing’ Workers Who Should Be Participating In The Labor Force But Are Not Actively Seeking Work.” (“Jobs Preview 2012:The Year of the Missing Worker,” Hamilton Place Strategies, 1/2012)

  • If Those Missing Workers Were In The Labor Force, Unemployment Would Be 10.4 Percent. “How is labor force participation looking today? At 64 percent, it is well below the peak of 67 percent during the dotcom bubble, and significantly below the steady state of 66 percent we saw during the 2000s.  Given the Baby Boom retirement and other demographic shifts, CBO projections expected it to be declining – 65.3percent at the beginning of 2012.  We are now 1.3 percentage points below tha tdemographic estimate, the equivalent of 3.2 million ‘missing’ workers. If the ‘missing’ people were in the labor force, the unemployment rate today would be 10.4 percent, not the current 8.5 percent.”  (“Jobs Preview 2012:The Year of the Missing Worker,” Hamilton Place Strategies, 1/2012)

Labor Force Growth Has Lagged Since The Recession Ended. “The size of the labor force makes a big difference in the unemployment rate, and labor force growth has been lagging estimates since the end of the recession –many people have either dropped out of the labor force, or have not entered in the first place.”  (“Jobs Preview 2012:The Year of the Missing Worker,” Hamilton Place Strategies, 1/2012)

  • Labor Force Participation Decreased Due To The Increase Of Discouraged Workers And Fewer People Entering The Workforce. “The number of ‘discouraged workers’ — those who have given up looking for work and thus aren’t counted as being part of the labor force — went up to 1.1 million from 950,000 in December. Also, slightly fewer people either reentered the workforce or entered it for the first time. Those are among the reasons why the ‘labor force participation rate’ went down to 63.7 percent from 64 percent in December.”  (Mark Memmott, “Unemployment Rate Edges Down To 8.3 Percent,” NPR’s “The Two-Way,” 2/3/12)
  • If And When Missing Workers Return To The Labor Force, There Will Be “Significant Upward Pressure On The Unemployment Rate.” “This is the ‘no-win’ situation the President faces as he begins his reelection campaign.  Even as we have seen a marginal improvement in economic activity at the end of 2011, we have not yet seen a return of the ‘missing’ labor force.  As these workers return, there will be significant upward pressure on the unemployment rate.” (“Jobs Preview 2012:The Year of the Missing Worker,” Hamilton Place Strategies, 1/2012)

In January, The Number Of Working Age Adults Not In The Work Force Increased By 88,000. “In January, working-age adults not participating in the labor force–those neither employed nor looking for work–increased by 88,000. Morici said many adults have quit looking for work altogether so the unemployment rate should be higher.” (Susanna Kim, “U.S. Jobs Report Skepticism: As Good As It Gets?” ABC News, 2/3/12)

 “If The Size Of The U.S. Labor Force As A Share Of The Total Population Was The Same As It Was When Barack Obama Took Office—65.7 Percent Then Vs. 63.7 Percent Today—The U-3 Unemployment Rate Would Be 11.0 Percent.” (James Pethokoukis, “Why The Official 8.3 Percent Unemployment Rate Is A Phony Number—And What It Means For Obama’s Reelection,” The American, 2/3/12)

  • If The Participation Rate Was The Same As One Year Ago, The Unemployment Rate Would Be 8.9 Percent. “But let’s not go all the way back to January 2009. In January 2011, the unemployment rate was 9.1 percent with a participation rate of 64.2 percent. If that were the participation rate today, the unemployment rate would be 8.9 percent, instead of 8.3 percent.” (James Pethokoukis, “Why The Official 8.3 Percent Unemployment Rate Is A Phony Number—And What It Means For Obama’s Reelection,” The American, 2/3/12)
  • The Unemployment Rate Would Be A Point Higher If It Counted The Thousands Who Have Given Up Looking For Work.  “A major reason that the jobless rate has gone from 9.9 percent to 8.5 percent in the past two years is that many thousands of people have given up looking for work. If the workers who dropped out were counted as unemployed, the jobless rate would be a full point higher, said Heidi Shierholz, an economist at the liberal-leaning Economic Policy Institute.” (Michael Fletcher, “Falling Jobless Rate Is Good News For Obama,” The Washington Post, 1/6/11)

Since November 2010, The Number Of Those Who Want Jobs But Aren’t Counted In The Work Force Has Risen To 6 Million. “There are all sorts of possibilities. Some stay at home, or decide to enroll in school, or focus on raising kids, or simply bide their time until the job market improves. The number of workers who want a job but aren’t counted in the labor force rose by 110,000 last month, and has risen since last November to about 6.1 million people.” (Brad Plumer, “Why Are People Dropping Out Of The Labor Force?” The Washington Post’s “Wonk Blog,” 12/2/11)

  • There Are 6 Million “Drop-Outs” Who Have Stopped Looking For Work. “One of the unanswered mysteries about the economy today isn’t just where the jobs are, but where the drop-outs are. Those ‘drop-outs’ are the 6 million would-be workers who are not counted in the labor force because they’ve stopped actively seeking more work, even if they’re very much hoping for more work.” (Derek Thompson, “Who Are The 6 Million?” The Atlantic, 12/29/11)