Obama Economy Labor Force Participation Rate Hits Low Not Seen Since 1977

The Bureau of Labor Statistics defines the
labor force as the percent of the civilian noninstitutional
population that is working or is seeking employment. During the
1950s and 1960s, the percent of Americans in the job market held
steady at about 60 percent and then began rising in the 1970s as
more women entered the paid job market. According to the BLS, the
labor force
participation rate reached its high of 67.3 percent in the year
2000. Remember this is the percent of Americans who are in the job
market, employed or not.

The market-oriented think-tank, the Employment Policies Institute has
just released an analysis reporting that the labor force
participation rate has dropped to 62.8 percent of the civilian
population. That rate was last seen thirty-six years ago in 1977.
Citing the latest BLS data, the EPI calculated that the U.S.
economy added about 204,000 jobs last month. Now the bad news. The
EPI further noted:

While 204,000 new jobs is a better number than we have seen
recently, the month-to-month signal is potentially murky. At a time
like this it’s useful to step back and take stock of the larger
picture. The larger picture, however, is grim. We need 8.0
million jobs to get back to the pre-recession unemployment rate,
and at the average rate of growth of the last 12 months, that won’t
happen for another five years. The unemployment rate has
improved substantially from its peak exactly four years ago of 10%
in October 2009. However, most of that improvement was not for good
reasons, it was due to the growth in the number of “missing
workers”—people who have dropped out of, or never entered, the
labor market because jobs opportunities are so weak. There are
currently roughly 6.1 million
missing workers, and if these workers were in the labor
force looking for work, the unemployment rate would be
10.8 percent instead of 7.3 percent.

In other words, the reason that U.S. unemployment rate declined
once the financial crisis abated is largely because so many
Americans have given up seeking a job. This suggests that the Obama
administration’s policy of trying to regulate our way to prosperity
by piling on more federal rules like minimum wage hikes, new health
insurance mandates, expanding Sarbanes-Oxley requirements, setting
limits of carbon dioxide emissions, ad infinitum, has failed.

Who knew?