The U.S. Jobs Report Laid Naked
In an election year, both Republicans and Democrats have their own spin on the plethora of data in the April jobs report released last Friday. Nobody thinks it’s good.
But the only statistic that really matters to ordinary Americans is whether or not they have a decent job. If they do, the economy is good. If they don’t, it’s not.
The April report stat maintained by the Bureau of Labor Statistics (BLS) that relates most to ordinary Americans is the Labor Force Participation Rate Report (LNU01300000).
For 2012 so far, that rate is annualized to 63.6%. What does that number mean to ordinary folks?
Labor Participation Rate (LNU01300000)
The labor participation rate is the percentage of all Americans 16 years or older eligible to work that are actually working.
That means, in this election year, that 63.6% of all Americans that could be working actually have paying jobs. 36.4% of all eligible workers don’t have paying jobs.
There are many, many legitimate reasons why those eligible to work don’t have paying jobs that are counted in the participation rate.
For example, First Lady Michelle Obama and Ann Romney, wife of Republican challenger Mitt Romney, are not counted. Neither could hardly be called lazy. They both are exceptionally hard workers towards their unpaid causes. Both are devoted mothers.
Another example of those not participating are retirees who are no longer in the work force. That number is growing with the aging of America.
That means nothing to a breadwinner struggling to feed their family.
Labor Participation Rate Put Into Perspective
In historical terms the labor participation rate today is the lowest since 1978. Fewer breadwinners are feeding their families.
Since 1948, when the BLS first started tracking it, the lowest annualized participation rate was 58.7% in 1963 and 1964. That was just after a recession and the assassination of JFK when women were first entered the work force in mass.
As clearly shown in chart 1 above, labor rate participation grew precipitously during the Reagan presidency in the 1980s, flattened out in the late 1980s and early 1990s and then resumed again under President Clinton until the tech bubble collapse at the end of his presidency.
Because the economy flattened out in the late 1980s and early 1990s, George H. W. Bush was drummed out of office in 1992 by Bill Clinton under the battle cry, “It’s the economy, stupid!”.
Since the heyday of the Clinton Administration, labor participation has been in a tailspin. That has been for two reasons – the tech bubble collapse in 2000 and the mortgage housing bubble collapse of 2008.
Labor participation rates are near historic lows. That is not good. None of that matters to breadwinners who can’t feed their families. In this day and age, many of them are single mothers.
What matters is they don’t have decent paying jobs. What is spelled out loud and clear in April’s labor participation rate is that there are large numbers of Americans in that predicament.
The question before struggling unemployed American voters is which candidate is best suited to fix the problem.
Do we want government to pay our bills or do we want government to help us find jobs so we can help ourselves?
The answer to that question will determine who is elected the next President of the United States.