White House economic report hides sharp drop in number of working Americans
White House officials are trying to downplay the growing political damage caused by a shrinking federal statistic: the percentage of working-age Americans who actually have jobs.
The increasingly visible statistic shows that roughly 11 million working-age Americans are being excluded from the nation’s formal tally of 13.75 million unemployed Americans.
Today’s 2012 Economic Report of the President attempts to bury the statistic in a 448-page blizzard of statistics, jargon and reassuring comparisons. “In the last 23 months, businesses have created 3.7 million jobs,” says the upbeat report, released at 4 p.m. on a Friday afternoon by the President’s Council of Economic Advisers.
Democrats are touting downward ticks of the formal unemployment rate to 8.3 percent, but Republicans are making an increased effort to highlight the painfully low employment participation rate.
A new chart produced by the Republican Study Committee shows the downward jumps of that job-participation rate, even after President Barack Obama deployed his trillion-dollar stimulus in February 2009, and after Obama declared the summer of 2010 a “Recovery Summer.”
“I expect you will be seeing this chart on the House floor during debates, it will be shown at town hall meetings and in district events,” committee spokesman Brian Straessle told The Daily Caller.
Amid the optimistic text in today’s economic report, the detailed tables reveal a sharp statistical decline.
In 2000, 64.4 percent of working-age Americans had formal jobs, either full-time or part-time, according to Table B-35 on page 361. That was the measure’s high water mark.
The ratio drifted down to 63.0 percent in 2007 before hitting the skids in the 2008 recession that was largely caused by federal real-estate policies.
By October 2009, five months after the recession technically ended, the ratio hit bottom at 58.5 percent, where it remained two years later in December 2011.
Given the nation’s working-age population of 240.5 million, that 4.5 percent drop means that roughly 11 million Americans have fallen out of the workforce. They are excluded, however, from the nation’s formal unemployment rolls — which document only 13.75 million unemployed Americans.
By excluding those non-working Americans, the White House can claim that the formal unemployment rate has fallen to 8.3 percent in January 2012, down from a peak of 10 percent in 2009.
But that 8.3 percent rate only include unemployed Americans who have looked for a job in the four weeks before a sample is taken. It does not include the more than 11 million Americans who have given up looking for jobs or who have quit the workforce entirely.
A graphic in the new economic report, likely aimed at obscuring the declining workforce ratio, highlights the growing percentage of younger Americans who have signed up for education opportunities instead of unemployment checks.
“The share of young adults aged 16 to 24 enrolled in school rose well above its trend between January 2008 and December 2011, sufficient to account for the entire decline in the labor force participation rate for this age group over this period,” claims the economic report.
By going back to college, however, many of these young people are putting themselves in debt. When they return to the workforce, their productivity will be offset by their share of the $1 trillion national student-debt bubble that is slowing consumption and family formation among younger Americans.
Friday’s report also argues that demographic changes, especially the retirement of the Baby Boom generation, will drag down the percentage of Americans who are looking for work by 0.1 percent per year, even after the unemployment rate drops and younger people leave education centers to seek jobs.
“The official recession ended back in 2009, but it still feels like a recession for so many Americans because the jobs are not out there,” Straessle told TheDC.
Despite the Obama administration’s optimistic statements and the artificially low unemployment rate, he said, “we don’t have the sharp pick-up that we see in many recoveries, such as the [Ronald] Reagan recovery in the 1980s.”