The official unemployment rate remains at an ugly perch of 8.2 percent, despite declines in recent months. But even that lofty level understates the magnitude of the jobs problem, according to a Wall Street Journal
blog by Paul Vigna.
He looks at the issue in terms of the labor force participation rate. That measures the percentage of working-age Americans, excluding those who are in jail or the military, who are “participating” in the work force. That includes both people who have a job and those looking for a job.
The rate has been dropping since January 2007, when it stood at 66.4 percent. The reading fell to 65.5 percent in July 2009, even as the Great Recession was officially ending, and currently registers an almost 30-year low of 63.8 percent.
Taking that drop into account produces a higher jobless rate. If you apply the July 2009 participation rate to today’s jobless numbers, that generates an unemployment rate of more than 10 percent. And if you utilize the 2007 participation rate, you’re left with a jobless rate of 11.8 percent.
“That means fewer people to contribute to economic growth. Fewer people to pay taxes. Fewer people to help the U.S. earn its way out of a $15 trillion debt hole (if indeed anybody thinks that’s even possible),” Vigna writes.
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