Yes, Our Cyclical Unemployment Is Turning into Structural Unemployment: Rapidly Going to Hell in a Handbasket Department
Felix Salmon:
April’s jobs: Americans aren’t working: This chart is just petrifying…. You’d think [the labor force participation rate] would have started to bounce back up by now, but no. Instead, we’re now deep into pretty much unprecedented territory. Yes, the participation rate has been this low before — back in 1981. But that was during the decades when women were still properly moving into the labor force. As Mike Konczal noted this morning, a key indicator of labor recession is still in force: if you’re unemployed, you’re still more likely to drop out of the labor force entirely than you are to find a job…
[…]
[G]o back just one year, to March 2011, and look at the official CBO projection of the labor force participation rate. The CBO saw a rate of 64.6% in 2012 — a full percentage point higher than we’re at right now. The participation rate wasn’t expected to fall to today’s level of 63.6% until 2017.
Politically speaking, the unemployment rate is still the number that people concentrate on. But increasingly, being unemployed is little more than a halfway house between employment and dropping out of the labor force altogether. Until the labor force participation rate stops falling and starts rising, the so-called recovery will remain a theoretical economic entity and not a real-world reality for hundreds of millions of Americans. We need jobs, and we need them now. Ben Bernanke, and Congress, are you listening?
