September 27, 2013
THE ECONOMIST: The Missing Millions: Where Are The Jobs?
It is true that unemployment has slowly dropped from a peak of 10% in late 2009, to 7.3% at present. But this decline overstates the health of the jobs market.
The labour-force participation rate, the share of the working-age population either working or looking for work, has plunged from 66% in 2007 to 63.2% in August, a 35-year low. If those people who have simply dropped out of the labour force were classified as unemployed, the headline jobless rate would be much higher. This drop in the participation rate is striking by international standards, too. Among 34 (mainly rich-country) OECD countries, only in Ireland and Iceland did participation rates fall farther between 2007 and 2012. In Italy and Britain, where unemployment rates have risen by a roughly similar amount as in America, labour-force participation rose (see left-hand chart).
How’s that hopey-changey stuff workin’ out for ya?