Jobs report post-mortem

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Like clockwork on the first Friday of every month the Labor Department reports on the unemployment situation in America. In the most recent report, released on May 4th, job growth slowed to a paltry 115,000. That's a far cry from Mitt Romney's 500,000 a month pipe dream but sufficient enough to blunt criticism that things are worse than they were when Obama took office (over 800,000 jobs were lost in his first month alone). Further muddling the partisan warfare over the monthly jobs report is the fact that the unemployment rate continued to fall, last month to 8.1%.



Of course many economists (and conservative pundits) are quick to point out that the rate drop is the result of a shrinking labor force: supposedly "discouraged" workers are dropping out of the workforce, presumably because they can't find work. But a closer examination of the data suggests a different conclusion. The shrinking workforce can actually be attributed to a number of other demographic shifts and trends.

Take for instance the Labor Department's 2011 Household data which showed of the 86 million people not in the workforce, 79.6 million were identified as not wanting a job. Only 989,000 people were identified as being discouraged over job prospects. Even among those who want a job, over 1.5 million people gave up looking for work due to family issues, school, or health problems.


In other words more people were discouraged from participating in the workforce because of personal issues than were discouraged over the prospect of finding a job. And the glaring fact remains that the vast majority of American's not participating in the workforce do so because they do not want a job, not necessarily because they can't find one.

Among those nonparticipants are retirees, specifically Baby Boomers who are beginning to leave the workforce in droves. In fact America's workforce participation has been declining for over a decade, and will likely continue to decline for another decade, in part, for that very reason. So it is a bit misleading to suggest that somehow our shrinking labor force is largely the product of a sluggish economy when in fact over 4 million new private sector jobs have been created over the past 3 years, and slowly but surely those who want to work are finding jobs again.


It is true that unemployment remains at a historically high level, and that many people have been unemployed for a rather long time. But despite the challenges ahead, it is important to account for the progress we've made. To that end, disingenuous claims about the monthly jobs report is misleading some into blaming president Obama for a problem that's not necessarily a problem, and discounting progress in order to score political points. 

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