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WH: “Economic Positive” That Younger Workers Shut Out Of Labor Market

RNC Communications - February 6, 2012

 

White House Press Secretary Jay Carney Claims The Decline In The Labor Force Is An “Economic Positive” Because It Means Young People Are “Getting More Education.” CARNEY: “Let’s look at some of the facts, which include that a large percentage of that is due to younger people getting more education, which in the end is an economic positive.” (Jay Carney, Press Briefing, Washington, D.C., 2/6/12)

The Labor Force Is Declining Because Millions Of Americans Are Discouraged By The Lack Of Opportunities In The Obama Economy

“Millions Of Americans Wake Up Each Morning Without A Job, Even Though They Desperately Want To Work. It's One Of The Depressing Legacies Of The Financial Crisis And Great Recession.”  (John Ydstie, “The State Of The Long Term Unemployed,” NPR, 12/12/11)

  • 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)

2.8 Million Americans Are So Discouraged By the Labor Market That They Have Given Up Looking For Work. “The lowest U.S. jobless rate in three years hasn’t changed the long-term picture for millions of Americans: about 5.5 million haven’t worked for 27 weeks or more and are still looking -- making up 42.9 percent of the total unemployed pool. Another 2.8 million are too discouraged to actively look for work in recent weeks or have other reasons for not wanting to be in the labor force, according to non-seasonally adjusted data released Feb. 3 by the Labor Department.” (Vivien Lou Chen, “Labor-Force Loss Prompts Search Of U.S. Churches: Economy,” BusinessWeek, 2/6/12)

  • Federal Reserve Chairman Ben Bernanke Said Concerns Over Long-Term Unemployment And “Labor Force Attachment” Were Part Of The Feds Decision To Keep Interest Rates At Zero Through 2014. “Long-term unemployment in the U.S. is a focus of attention among Federal Reserve officials, who last month said they would keep borrowing costs low through at least late 2014 to boost the economy and put more Americans back to work. ‘We’re concerned that the large amount of long-term unemployment may be causing some workers to lose skills or lose labor force attachment,’ Fed Chairman Ben S. Bernanke said at a Jan. 25 news conference.” (Vivien Lou Chen, “Labor-Force Loss Prompts Search Of U.S. Churches: Economy,” BusinessWeek, 2/6/12)

“Apparently Discouraged By Scant Openings, 412,000 Young Women Have Dropped Out Of The Labor Force Entirely In The Last Two And A Half Years, Meaning They Are Not Looking For Work.” (Catherine Rampell, “Instead Of Work, Younger Women Head To School,” The New York Times, 12/28/11)

  • But The Growth In College Enrollment Is Not Large Enough To Account For Those Leaving The Labor Force. “Both men and women are going back to school, but the growth in enrollment is significantly larger for women (who dominated college campuses even before the financial crisis). In the last two years, the number of women ages 18 to 24 in school rose by 130,000, compared with a gain of 53,000 for young men.” (Catherine Rampell, “Instead Of Work, Younger Women Head To School,” The New York Times, 12/28/11)
  • Since October, The Number Of 20 To 24 Year Olds Not In The Labor Force Increased By 424,000. (Bureau Of Labor Statistics, Accessed 2/6/12)

“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)

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)

  • 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)

White House Tries To Spin Again, Says Labor Force Decline Due To Demographic Trends

WH Press Secretary Jay Carney Claims That Workers Are Leaving The Labor Force Because Of Demographic Trends. CARNEY: “There is a fact that this increase in the number of people leaving the workforce is a trend and a fact since 2000 because of an aging population.” (Jay Carney, Press Briefing, Washington, D.C., 2/6/12)

  • But The Chicago Federal Reserve Found That During The Last Three Years Only A Quarter Of The Decline In The Labor Force Participation Rate Is Due To Demographics. “Indeed, over the 2008–11 period, we find that only one-quarter of the 1.8 percentage point decline in actual LFPR for 16–79 year olds can be attributed to demographic factors.” (Daniel Aaronson, Jonathan Davis and Luojia Hu, “Explaining The Decline In The U.S. Labor Force Participation Rate,” The Federal Reserve Bank Of Chicago, March 2012)

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