Employment: We’ve been hearing for months now about the snapback in payroll jobs that has helped push the unemployment rate down to 5%. A new report, however, suggests that this widely used number isn’t believable.
The report, “America’s Hidden Weakness,” from Express Employment Professionals, suggests that a large number of workers who are capable of working but don’t have a job have completely given up on looking. These labor dropouts mask the true underlying weakness of the labor market, since they’re not counted as part of the unemployed.
Some 40% of those who don’t have jobs have simply stopped hunting for one, says the report. And that number is even higher — 55% — for those who’ve been out of work for more than two years.
What’s most worrisome is that this report suggests there’s a fundamental problem with the U.S. job market, one we’ve never faced before.
“The labor force participation rate has continued to shrink, even in a growing economy,” the report said. “By almost any measure, that is a surprising trend.”
The U.S., by the way, is the only major global economy to report a decline in labor participation from 2000 to 2014, according to a 2015 Organization for Economic Co-operation and Development study. Even Spain and Greece saw increases, as did Britain.Read thw rest of this IBD editorial HERE.