Conservative media figures have been attacking President Obama's economic record by citing the fact that approximately 88 million Americans are not considered part of the labor force. In fact, only a small fraction of those “not in the labor force” actually want to work, and economists say the long-term decline in labor force participation is due to changing demographics -- a trend that is likely to continue over the next decade.
Right-Wing Media Hype New “88 Million” Talking Point
Breitbart.com: “The Number Of Americans Not In The Labor Force Has Hit A Record High 87,897,000.” From Breitbart.com:
Amid disappointing unemployment numbers that fell 80,000 jobs short of projections, another number is raising eyebrows: the number of Americans not in the labor force has hit a record high 87,897,000.
This figure explains why overall unemployment dropped from 8.3% to 8.2%, as the Department of Labor's unemployment figure does not include people who have given up hope and are not actively seeking employment. [Breitbart.com, 4/7/12]
Rove: “88 Million People, A Record Number Of People, Are Not In The Workforce.” From Fox News' America's Newsroom:
KARL ROVE (Fox News contributor): [Y]ou've got 12.7 million people who are unemployed. You've had 38 months of 8 percent or greater unemployment. You have the so-called U-6 unemployment rate. That's people who are out of work, people who are working part time while looking for full-time work, or are, you know, discouraged -- 14.5 percent, that means one out of every six Americans. And we know these people. They're in our neighborhoods, they're friends, they're family, they're people we socialize with, people we worship with. One out of every six Americans is not where they want to be economically. And 88 million people, a record number of people, are not in the workforce. Eighty-eight million. That's the biggest number in history of people who've not been in the workforce. [Fox News, America's Newsroom, 4/9/12]
National Review's McCarthy: “Millions Have Been Added To The Black-Hole Category Of 'Not In The Labor Force'...That Number Is At All-Time High: 88 Million.” From a post by Andrew McCarthy on the National Review blog The Corner:
Through the magic of Washington Math and the Obama Labor Department, the metric “unemployment rate” has become as nonsensical as “jobs created or saved” by the stimulus. The Obamedia creates a free campaign ad out of the purported drop from 8.3% to 8.2% (i.e., from appalling to marginally less appalling), but meantime millions have been added to the black-hole category of “Not In the Labor Force” -- people who are so discouraged that they are not looking for work. That number is at an all-time high: 88 million. Thus the labor force participation rate, at under 64%, is lower than it's been in 30 years. [The Corner, NationalReview.com, 4/9/12]
RedState: “There Are Now 88 Million Americans Who Are 'Not In The Labor Force.'” From RedState.com:
Well, after Friday's jobs numbers came out (the economy added 120,000 jobs) Labor Secretary Hilda Solis promptly proclaimed: "That's a noteworthy achievement."
In fact, for the man who campaigned on the message of “hope” in 2008, the 120,000 jobs added is much fewer (about half) than expected and the edging down of the unemployment to 8.2% is not from job creation but from hopelessness.
There are now 88 million American who are “Not In Labor Force,” according to Department of Labor statistics, which the St. Louis Federal Reserve put into this pretty chart:
Obviously, others are seeing past Obama's cheerleaders. [RedState.com, 4/7/12 (emphasis original)]
Analysts Say Demographics Are To Blame For Long-Term Decline In Labor Force Participation ...
BLS: Participation In The Labor Force Peaked In 2000 And Has Been Decreasing Since Then. From an article by economist Mitra Toossi in the Bureau of Labor Statistics publication Monthly Labor Review:
The slower growth of the labor force is primarily the result of a slower rate of growth in the U.S. population and a noticeable decrease in the labor force participation rate. The civilian noninstitutional population 16 years and older had an annual growth rate of 1.1 percent from 2000 to 2010, but is projected to grow by a lesser 1.0 percent during 2010-2020. (See table 2.) In addition, the labor force participation rate started a downward trend in 2000, and the decrease accelerated during the 2007-2009 recession and its aftermath. As a result, the labor force participation rate declined by 2.4 percentage points over the 2000-2010 period and is projected to drop by another 2.2 percentage points between 2010 and 2020. These two declining factors lead to a projected annual growth rate of only 0.7 percent for the labor force from 2010 to 2020, a 0.1-percent drop from the annual growth rate exhibited in the 2000-2010 timeframe. [BLS.gov, January 2012 (emphasis added)]
From BLS data, via the Federal Reserve Bank of St. Louis:
[StLouisFed.org, accessed 4/9/12]
Chicago Fed Economists: “Shifting Demographics” Are Responsible For “Just Under Half Of The Decline.” From Daniel Aaronson, Jonathan Davis, and Luojia Hu, writing in the Federal Reserve Bank of Chicago's Chicago Fed Letter:
Labor force participation has fallen significantly over the past decade. At least some of this decline is due to the recent deep recession and lackluster recovery. Additionally, for quite some time, economists have forecasted that shifting demographics, particularly in the age structure of the population, would put downward pressure on labor force activity. We estimate that just under half of the decline in LFPR since 2000 is due to such factors. We expect these demographic patterns to continue for at least the next decade, and likely far beyond, as the large baby boom cohort continues the transition into retirement. Therefore, standard labor market measures used to compute gaps in resource utilization, such as the employment-to-population ratio and the LFPR, should reflect these long-running patterns. [ChicagoFed.org, March 2012]
Federal Reserve Economists, In 2006: “Structural Factors Will Continue To Put Downward Pressure On The Participation Rate For Some Time.” Stephanie Aaronson, Bruce Fallick, Andrew Figura, Jonathan Pingle, and William Wascher of the Federal Reserve Board of Governors wrote:
[S]tructural factors will continue to put downward pressure on the participation rate for some time, so that any future cyclical fluctuations in participation will take place around a declining trend. This continued downtrend, coupled with slower projected population growth and an apparent downtrend in the average workweek, suggests that trend growth of aggregate hours will slow further in coming years. [Brookings Papers on Economic Activity, 2006, No. 1, accessed 4/9/12]
Fed Economists Cite “Important Structural And Demographic Developments” Such As “The Aging Of The Baby-Boom Cohort” As Partially Explaining Declining Participation Rate. From the Fed economists:
[I]mportant structural and demographic developments appear to have been at work as well. First, the aging of the baby-boom cohort has been raising the share of the population in older age groups, for which participation rates have historically been much lower than for younger groups, and this compositional change has been putting downward pressure on the aggregate participation rate. Second, participation rates for newer cohorts of adult women appear to have flattened out after more than three decades of steady rise, while new cohorts of men continue to be less inclined to participate in the labor market than their predecessors. Third, we find that teenagers and young adults are remaining in school longer and are reducing their labor force attachment whether in or out of school. Finally, and partly offsetting these other influences, older workers are increasingly delaying retirement or reentering the labor force following retirement, a development that seems to reflect better health, longer life spans, and changes to Social Security rules. [Brookings Papers on Economic Activity, 2006, No. 1, accessed 4/9/12]
CBO: “Demographic Effect Has Already Reduced [Labor Force Participation] By About 0.5 Percentage Points Since 2007.” From a March Congressional Budget Office background paper titled “CBO's Labor Force Projections Through 2021”:
CBO estimates that the demographic effect has already reduced the overall rate of participation by about 0.5 percentage points since 2007 and that it will do so by an additional 1.2 points by 2016 and by another 1.4 points between 2016 and 2021 (see Figure 3). Thus, demographics account for slightly more than the entire projected decline of 3.0 percentage points in the aggregate participation rate between 2007 and 2021. [CBO.gov, 3/2011]
... And Most People Who Are “Not In The Labor Force” Don't Want A Job
BLS: Number Of Americans Who Are Not In The Labor Force And “Currently Want A Job” Is 6.2 Million -- 7.2 Percent Of The Total. According to the Bureau of Labor Statistics' March 2012 Employment Situation news release, approximately 6.25 million workers are counted as being both “Not in the labor force” and as “Persons who currently want a job.” This represents approximately 7.2 percent of the total number of Americans who are counted as not being in the labor force. [Table A-16, BLS.gov, 4/6/12]
Wash. Post: 65 Percent Of Those Who've Left The Labor Force Since 2007 “Don't Want A Job.” Citing survey data from Barclays, Brad Plumer of The Washington Post's Wonkblog wrote:
About 35 percent of the people who have dropped out of the labor force since the recession began in 2007 do want a job, but they've become too discouraged to fire off resumes. That's not good. The other 65 percent are people who have left the labor force and don't want a job. Some of them are young and perhaps decided to go back to school. But the biggest chunk, by far, seems to be composed of Baby Boomers who have decided to retire early. [Washington Post, 4/8/12]