There's a Stunning Problem With April's Glowing Unemployment Numbers

There's a Stunning Problem With April's Glowing Unemployment Numbers

The April jobs report is out, and there's good news and bad news.

The good news is that mild weather and a stronger recovery have added about 288,000 jobs — with the standard measure of unemployment falling from 6.7% to 6.3%, the lowest since September 2008. Private businesses added 273,000 jobs, while federal, state, and local governments added 15,000 jobs.

The bad news? Much of the percentage decline came because the labor force (which includes those working and looking for jobs) shrank by 806,000 people. The participation rate fell from 63.2% to 62.8%, a .4% drop. That means that a significant amount of people who might otherwise be looking for a job have either stopped or chosen not to enter the workforce. That's a 35-year low.


Vox quotes one Labor Department official who says that the usual explanation (the economy is so rough that people have stopped looking for work) might not apply in this situation.

"Our analysis of the household survey data suggests that the April labor force decline was due mostly to fewer people entering the labor force than usual, rather than to more people exiting the labor force," wrote Erica Groshen, the Bureau of Labor Statistics commissioner.

Who exactly is leaving the economy? Well, it looks like that as the market for people with a college or graduate degree improves, people with less than a college degree or lacking even a high school diploma were badly hit.



Though the breakdown doesn't point to discouragement being the only factor preventing low-education workers from finding productive jobs (retiring Baby Boomers play a role), it's certainly at least one factor that should be taken very seriously in the overall assessment of the otherwise positive jobs report. And when you get down to it, 6.3% is still a pretty bad overall unemployment rate. People are still hurting.


And wages still aren't particularly great.


Furthermore, Vox notes that we're not even fully recovered from the recession in terms of jobs, let alone growing. This is still the tail end (hopefully) of a pretty deep slump. And even when people are getting jobs, more and more of the income is going to the investor class rather than workers — company profits are at a 85-year record high, while employees received just 45% of the nation's income, "down from 48.6% in 1929, 51.6% in 1953, 49% in 1965, and 44.8% in 2008." According to the right-leaning Generation Opportunity group, the total number of 18-29-year-olds looking for work is still very high, with a U-6 rate of 15.5%. A recent Harvard poll found that 45% of young Americans feel the country is on the wrong track, opposed to just 21% who thought it was heading in the right direction. Disposable income for all income levels has been falling for the past 15 years, but the bottom 20% of earners have been sharply hit and remain struggling.

But in the aggregate, this was a better-than-expected month, with a broader measure of job distress (including part-timers who want full-time jobs, the unemployed, and people who have given up) falling to 12.3% from 12.7%. It's not boom times, but it's something.



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Tom McKay

Tom is a staff writer at Mic, covering national politics, media, policing and the war on drugs. He is based in New York and can be reached at tmckay@mic.com.

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