Rethinking the Unemployment Rate: How We're Getting it Wrong
Rethink the unemployment rate | reTHINK TANK
Low unemployment. Record-high stock markets. New jobs created month after month. And yet... record numbers of people out of work. When the Bureau of Labor St...
The numbers seem to tell a tale of massive prosperity overtaking nearly all Americans. With unemployment rates at deep lows, stocks and wages surging, one may think that the economy is set on automatic? But one important and concerning number is being left out of the conversation.
While the unemployment rate has gone down, and the total employment rate has gone up, another number has also gone up and it shows a real crisis among working-age Americans: non-participation in the labor force.
Nicholas Eberstadt, scholar of economics, discusses this major problem in the video above.
There are three different categories of employment status for adult Americans: you can be employed, you can be unemployed or you can be completely out of the workforce, neither working nor looking for work. The unemployment rate only measures the percentage of people who are in the workforce looking for work, who don't have jobs. It completely ignores those people who have neither jobs nor are looking for them. And as it happens, that group is the fastest growing demographic group for male Americans and has been for two generations.
This "invisible crisis" is putting these people at higher risks of social dysfunction, for things like crime and drug abuse. Men who are not in the workforce are statistically more likely to engage in destructive behaviors. And with the expansion of the social safety net of the welfare state, non-participation in the workforce has now become a lifestyle. That does not offer a bright future for America.
What are the best ways to fix this crisis? Watch the full video above and let us know what you think!