Saturday, February 18, 2012

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.

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