The mainstream media is absolutely giddy that the U.S. unemployment rate has hit a “four-year low” of 7.7 percent. But is unemployment in the United States actually going down? After all, you would think that it should be. The Obama administration has “borrowed” more than 6 trillion dollars from future generations of Americans, interest rates have been pushed to all-time lows, and the Federal Reserve has been wildly printing more money in a desperate attempt to “stimulate” the economy.
So have those efforts been successful? Well, according to the mainstream media, the U.S. unemployment rate is falling steadily. Headlines all over the nation boldly declared that “236,000 jobs” were added to the economy in February, but what they didn’t tell you was that the number of Americans “not in the labor force” rose by 296,000. And that is how they are getting the unemployment rate to go down – by pretending that huge numbers of unemployed Americans don’t want jobs.
Sadly, as you will see below, the truth is that the percentage of working age Americans that have a job is just 0.1% higher than it was exactly three years ago. And we have not even come close to getting back to where we were before the last economic crisis. For example, more than 146 million Americans were employed back in 2007. But today, only 142.2 million Americans have a job even though our population has grown steadily since then. So where in the world is this “economic recovery” that they keep talking about?
At this point, the “unemployment rate” has become so meaningless that it really isn’t even worth paying much attention to. If you really want to know what the employment picture looks like in the United States, you need to look at the employment-population ratio.
As Wikipedia tells us, many economists consider the employment-population ratio to be far superior to other measurements of employment…
The Organization for Economic Co-operation and Development defines the employment rate as the employment-to-population ratio. The employment-population ratio is many American economist’s favorite gauge of the American jobs picture. According to Paul Ashworth, chief North American economist for Capital Economics, “The employment population ratio is the best measure of labor market conditions.” This is a statistical ratio that measures the proportion of the country’s working-age population (ages 15 to 64 in most OECD countries) that is employed. This includes people that have stopped looking for work.
A chart of the employment-population ratio in the United States over the past several years is posted below…
As you can see, the percentage of Americans with a job fell from about 63 percent to below 59 percent during the last economic crisis. Since that time, it has not risen back above 59 percent. This is the first time in the post-World War II era that we have not seen the employment rate bounce back following a recession. At this point, the employment-population ratio has been below 59 percent for 42 months in a row.