Felix Salmon writes about today's mediocre jobs report:[The chart below] is just petrifying. The participation rate started falling after the dot-com bust, leveled off during the credit boom (but never really rose much), and then fell off a cliff when the recession started. You'd think it would have started to bounce back up by now, but no. Instead, we're now deep into pretty much unprecedented territory. Yes, the participation rate has been this low before'back in 1981. But that was during the decades when women were still properly moving into the labor force.
As Mike Konczal noted this morning, a key indicator of labor recession is still in force: if you're unemployed, you're still more likely to drop out of the labor force entirely than you are to find a job. [...]
For demographic reasons'the retirement of the baby boomers'the labor force participation rate is naturally going to fall over the next decade. But go back just one year, to March 2011, and look at the official CBO projection of the labor force participation rate. The CBO saw a rate of 64.6% in 2012'a full percentage point higher than we're at right now. The participation rate wasn't expected to fall to today's level of 63.6% until 2017.
Politically speaking, the unemployment rate is still the number that people concentrate on. But increasingly, being unemployed is little more than a halfway house between employment and dropping out of the labor force altogether. Until the labor force participation rate stops falling and starts rising, the so-called recovery will remain a theoretical economic entity and not a real-world reality for hundreds of millions of Americans. We need jobs, and we need them now. Ben Bernanke, and Congress, are you listening?
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