16% Of All Men 25 to 54 Are Not Working! That Is A Disaster, Regardless Of What Government Stats Say

Mass Flight From U.S. Labor Force Drives Down April Unemployment

May 2, 2014 by Ben Bullard 

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The U.S. labor force benefited from the creation of 288,000 jobs last month, the highest number since the start of 2012, and the National rate of unemployment concurrently fell from 6.7 percent in March to 6.3 percent.

You can see how Bloomberg and the Associated Press reported the good news here andhere.

Read far enough into those stories – and it will take you a while – and you’ll eventually encounter the lede: The number of people participating in the U.S. labor force in April shrank by a staggering 800,000. As you know, people who aren’t looking for work aren’t counted in the BLS’ calculation of the unemployment rate. Yet the number of people who have bowed out of the American labor force now stands at 92 million.

That’s nearly one-third of the population of the entire country – and roughly 38 percent of the241 million residents over the age of 18.

With 38 percent of American adults not even trying to find work, what difference does a 6.3 percent unemployment rate make? The Obama Administration found the silver lining in the April numbers, noting that the actual rate of job creation is, in fact accelerating – which, so far as it goes, is certainly true – and that several economic sectors saw an uptick in hiring during April (also true).

But the Bureau of Labor Statistics numbers also reveal that hourly earnings did not increase – an indicator that much of that growth is still coming in the form of low-wage, low-skill jobs (so much for closing that pernicious wealth gap, Obama).

And, stepping back, the labor economy in the U.S. reflects an ongoing anemic “recovery” trend – one that hasn’t seen growth commensurate with periods of economic growth through the last two decades of the 20^th Century – often cited as a benchmark by which present economic growth is measured.

“Unfortunately, the effects of currency manipulation on the U.S. economy – along with self-imposed restraints on oil and gas development and the manifest inefficiencies imposed by dysfunctional management and profiteering in health care, higher education, and finance – have lowered U.S. annual growth to 1.7 percent since the turn of the century from the 3.4 percent pace accomplished during the Reagan-Clinton era,” wrote Peter Morici for Breitbarttoday.

“Consequently, jobs creation lags population growth. The unemployment rate, which fell to 6.3 percent in April from 6.7 percent the prior month, wholly masks the extent of the problem. The percentage of adults seeking employment dropped precipitously. One out of six men between the ages of 25 and 54 are without jobs, and many have given up looking for work and are not counted in the jobless rate.”

Underemployment Is A Major Problem. Could It Result In Riots This Summer?

At Least 27 Million Americans 'Underemployed'

While the official unemployment rate last year was 8.1 percent, a far greater percentage of working-age Americans were "underemployed."

According to the Bureau of Labor Statistics, the underemployment rate in 2012 was 14.7 percent, amounting to 23.1 million people.

Underemployed Americans include those who are officially considered unemployed, plus involuntary part-time workers and "marginally attached" workers — those who have not looked for work within the last four weeks but have sought a job within the last year and are available for employment.

About 2.5 million people were marginally attached workers last year, and 8.1 million were involuntary part-time workers.

As troubling as that may be, the actual figures are likely much worse, according to a report by Wendell Cox for NewGeography.com.

For instance, Gallup estimated that the nation's underemployment rate stood at 17.4 percent in August, meaning that there are more than 27 million underemployed workers.

Also, economists at the Center for College Affordability and Productivity have estimated that 48 percent of college graduates who are employed hold jobs that do not require a college degree. These are not included in the underemployment figures. If they were, the underemployment rate would soar.

Nevada had the highest underemployment rate during the year ending on June 30, 19 percent, followed by California with 18.3 percent. The lowest rates were in North Dakota at 6.2 percent and South Dakota, 7.8 percent.

"The productivity gap that results from underemployment constrains the U.S. economy at a time of unusually severe financial challenges," observes Cox, visiting professor at the Conservatoire National des Arts et Metiers in Paris and the author of "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life."

"College graduates face not only a grim employment market, but have student loan repayments that require good jobs," he adds.

"Yet things could get worse. The soon to be implemented Patient Protection and Affordable Care Act (Obamacare) has a built-in incentive for employers to shift workers to part-time status" or to hire part-time workers to avoid the mandate to provide health insurance to full-time workers.