JOBS REPORT: Another 425,000 Americans dropped out of labor force in October

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  by  Eric Ruark

The November jobs numbers came out today and there was no substantive change in the U.S. labor market, meaning the situation is still dire for tens of millions of American workers. It also means that The New York Times continued to gush about “healthy job growth.” According to the Times, 161,000 new jobs created in October, and the unemployment rate dipping down to 4.9 percent, “suggest[s] a healthy outlook for the months ahead.”

No, it suggests something much different.

Last month we pointed out how “jobs created” is different than number of “newly employed workers,” and that growth in employment has to be measured against the increase in the working-age population. The new jobs report illustrates this very well, as the number of people not working increased substantially more than the number of those who found work in October, yet the unemployment rate went down.

While establishment (employer) survey estimated that 161,000 new jobs were added during October, the U.S. working-age population increased by 200,000. That is why the household survey found the number of Americans working last month decreased by 43,000. The number of Americans officially “unemployed” went down not because they found a job, but because they dropped out of the labor force altogether, which means the government stops counting them when it calculates the unemployment rate.

In effect, the unemployment rate went down in October because 425,000 people (in just one month!) were moved from the “unemployed” column to the “not in the labor force” column on a government spreadsheet. There are now 94.6 million above age 16 in the United States not in the labor force. That is 37% of that population. And this is what The New York Times heralds as the harbinger of a healthy labor market heading into 2017!

As we also pointed out last month, the increase in the number of Americans not working is partially due to older workers retiring, and partially due to a troubling rise in the number of Americans between the prime working ages of 18 and 64 dropping out of the labor force.

In 2000, the number of 18- to 64-year-olds not in the labor force was 38.1 million; today that number is 49 million.

In 2000, the number of U.S.-born 18- to 64-year olds not in the labor force was 31.8 million; today it is 40.1 million.

In 2000, the number of U.S.-born Black 18- to 64-year olds not in the labor force was 4.9 million; today it is 7.2 million.

In 2000, the number of U.S.-born Hispanic 18- to 64-year-olds not in the labor force was 2.3 million; today that number is 4.9 million.
(Figures from CIS and CPS)

There are multiple causes for this trend, but the only way it can be effectively addressed is to reduce the level of immigration into the United States so the labor market better reflects the realities of Twenty-First Century America.

Dark humorists have pointed out that when everyone drops out of the labor force, politicians will take credit for reducing the unemployment rate to 0%. I wonder if that’s how The New York Times will report it.

ERIC RUARK is the Director of Research for NumbersUSA

Tags:  
unemployed Americans
jobs
population growth
labor market

From Numbers U.S.A. Original Story