Today's Washington Post clearly identifies the facts about unemployment. There are two important embedded stories there. 1) All of the unemployed middle aged people cannot be saving for their retirement the way Paul Ryan imagines they are doing. 2) Every day of unemployment among our most skilled and talented members is production that is lost to our economy forever.
Job recovery is scant for Americans in prime working years
By this measure, the jobs situation has improved little in recent years. The percentage of workers between the ages of 25 and 54 who have jobs now stands at 75.7 percent, just a percentage point over what it was at the downturn’s worst, according to federal statistics.
While the unemployment rate may be the most closely watched gauge of the economy in the presidential campaign, this measure of prime-age workers captures more of the ongoing turbulence in the job market. It reflects “missing workers” who have stopped looking for work and aren’t included in the unemployment rate.
During their prime years, Americans are supposed to be building careers and wealth to prepare for their retirement. Instead, as the indicator reveals, huge numbers are on the sidelines.
“What it shows is that we are still near the bottom of a very big hole that opened in the recession,” said Heidi Shierholz, an economist at the Economic Policy Institute, a left-leaning think tank.
The falloff has been sharpest for men, for whom the proportion had been on a slow decline before the recession. The percentage of prime-age men who are working is smaller now than it has been in any time before the recession, going all the way back to 1948, according to federal statistics. The proportion of prime-age women is at a low not seen since 1988.
The nation’s unemployment rate has shown signs of improvement, ticking down from 10 percent to 8.1 percent. But if it tallied people who have given up looking for jobs, it would certainly be higher.
The ratio of employment to population, which economists refer to as “epop,” “is a much better measure for what people are experiencing in the job market,” Shierholz said. “The unemployment rate is screwy right now because the labor market is so weak that people have stopped trying.”
For example, last month, the unemployment rate ticked down from 8.2 percent to 8.1 percent. Ordinarily, a drop in unemployment would be interpreted as a sign of improving economic health. But it dropped largely because so many people stopped looking for jobs.
Shierholz estimates that about 4 million workers have simply stopped looking, and so do not show up in the tally used for the unemployment rate.
As the presidential race heads into the summer, the health of the economy — and how voters view it — becomes critical, and for many people, the job market is their most significant contact with the economy.
According to the most recent Washington Post-ABC News poll, the issue of paramount interest to voters is the economy and jobs, with more than half describing it as the “single most important issue.”
By comparison, the next most important issue, health care, trailed far behind at 7 percent, and moral and family values followed at 5 percent.