Posted: 11/12/15 20:45
by Dave Mindeman
Labor statistics are always cited in economic discussions. These statistics can be manipulated depending on what kind of point you are trying to make. The national unemployment figure has been steadily trending downward since the great recession and as corrective measures finally took hold. The Obama administration also can point to an unprecedented 67 consecutive months of job growth. That is the longest streak we have ever had since we have kept labor records.
So when Republicans go into their "woe is us" economic arguments, they have to look for some kind of competing statistic....and they have seemed to latch onto "workforce participation".
So let's get some definitions. According to the CPS (Current Population Survey), a worker is only officially unemployed if he or she lacks a job, has actively searched for a job in the last four weeks, and is available to work.
So who would be the people not working who are not counted as unemployed?
The largest population in this group would be retirees. It is not surprising that workforce participation is trending down because the baby boomers are beginning to peak as retirees.
But another trend is that younger people 18-24 are also a growing statistical number that do not work, yet are not counted as unemployed. Why is that? Because they are spending more years in school...higher education. It is hard to see this as a bad sign for the economy...after all, we are in dire need of a higher skilled workforce.
Prior to the economic downtown in 2007, workforce participation was at 62.7% Our economic situation brought that number down to a bottom figure of 58.2% in 2010. The unemployment numbers were also high and our economy was in trouble. But over the next four years, workforce participation has been climbing - in June it was back to 59.3%
For a comparison, our peak figure is 64.7% in April of 2000, still basking in the 1990's economic boom. So, although things have improved, we are still a full 5 percentage points below the high. Not as bad as Republicans would have you think, but still not where we would like to be.
But there is another trend that is affecting that workforce participation that the GOP would rather not publicize too much.
If you do a gender comparison of workforce participation, you would see that participation by men has been on a very slow but steady decline since 1948. That trend shows no signs of abating.
If you look at female participation, you see the opposite. The number is on a steady increase from 1948 until it seems to peak in 1998. After that the women's participation shows about the same kind of decline as men.
(These statistics are taken from testimony by Elisabeth Jacobs, Senior Director for Policy and Academic Programs, Washington Center for Equitable Growth, testifying before the United States Joint Economic Committee on "What Lower Labor Force Participation Rates Tell Us about Work Opportunities and Incentives" - posted in June, 2015.)
Here is a logical explanation of why women have been leaving the workforce in the last decade...
In 1990, the United States had the sixth-highest female labor force participation rate amongst 22 high-income OECD countries. By 2010, its rank had fallen to 17th. Why have other high-income countries continued their climb while the United States has stalled? Research by economists Francine Blau and Lawrence Kahn suggests that the absence of family-friendly policies such as paid parental leave in the United States is responsible for nearly a third of the U.S. decline relative to other OECD economies. As other developed countries have enacted and expanded family-friendly policies, the United States remains the lone developed nation with no paid parental leave.
Do you think a Republican official is going to mention this explanation when talking about workforce participation? I seriously doubt it.
But the absence of family and parental leave coupled with gender pay inequities do not seem like the incentive women need to come back to the labor force.
So when you hear politicians talk about the undercurrent of pain in the economy not reflected by the official unemployment rate, maybe they need to examine some of the other labor policies that have not been enacted which might improve that situation.
As often happens, it is what they don't say that matters.