Wednesday, July 22, 2015

COTW: Forgetaboutem

This chart is U-6, the broadest official measure of umemployment.  It includes unemployed, marginally attached workers, plus part-time for economic reasons. While it has gone down during the "recovery"  it is still above 10% and hides a much more worrisome  trend:

That trend is to simply write off people who are not counted in the labor force because they have not looked for work actively by punching their ticket at the local employment office but who want a job now. According to government statistics the number who are in that uncounted category is 6,076,000, about a 1% decrease from a year ago. So if unemploment is droping why not this number too? The answer is that more people are dropping out of the labor market, and its not just over 65 retirees. This chart shows that as the population has increased, the number of people not counted in the work force, and not institutionalized, is increasing faster:

So although the employment picture is improving if you listen to the hacks of the CMM, it is improving partly because fewer long-term unemployed people are looking for work anymore. It is typical to see not-in-labor force gains of half a million in each new current population survey. As a trend, the annual increase in long term unemployed started in 2009 (below).  The labor participation rate is 62.6% the lowest since October 1977, before minorities and women entered the labor market in force.  Recovery for the displaced wage slave? Not so much because you just do not count.