Behind The Numbers: Workforce Dropouts

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from OurFuture.org:



Behind The Numbers: Workforce Dropouts
By Charles McMillion

April 3rd, 2009 - 4:01pm ET


Today’s Bureau of Labor Statistics report on unemployment and jobs in March confirms that the economy continues to spiral downward as deeply stressed households face worsening employment and financial conditions.

Media love to report the unemployment rate but rarely explain what it means. The unemployment rate in March surged to 8.5 percent, from 8.1 percent in February and 5.1 percent in March 2008. This is the worst unemployment rate since October 1983 – and the worst for a Democratic president since FDR. But that only tells a small part of the story.

The other part of the story is who is counted and who is not counted in the unemployment figure. Today’s report shows that another 166,000 people vanished from the labor force in March. That is, they indicated when asked that they were neither working nor looking for work. March was the fifth month out of the last seven months that more people dropped out of the labor force than joined. Indeed, there were fewer people counted in the labor force in March than there were last May.

It is normal for people to be discouraged during a recession – thereby causing the labor force to grow more slowly than the usual 1.5 percent annual growth of the past 30 years, but the current meager 0.1 percent year over year growth is quite unusual. Obviously, if fewer people were dropping out of the labor force, the unemployment rate would be far higher.

The BLS’ most inclusive measure of under-utilized labor (the U-6 unemployment rate) soared to 15.6 percent in March from 14.8 percent in February and 9.1 percent in March 2008. ........(more)

The complete piece is at: http://www.ourfuture.org/blog-entry/2009041403/behind-numbers-workforce-dropouts