The New York Times announced recently that the United States might be approaching full employment. It’s that magical economic condition where anyone who wants a job can find one and wages increase relative to consumer prices. The Federal Reserve Bank defines it as between 4.5 to 5.0 percent of the labor force unemployed.
It is great that economic conditions for workers are improving, and that the Times is willing to trumpet them during a Republican administration. But does it feel to you like we are anywhere near full employment, or does it seem like we have a lot of work to do before we reach that condition? If you are skeptical, you aren’t alone.
If you look deeper into the United States Bureau of Labor Statistics (BLS) website, you’ll find that the numbers aren’t as rosy as they might seem. First of all, BLS doesn’t just report the number of those who would like to work vs. those who have a job. In fact, they have several measures of unemployment. The most commonly reported is what they call U-3, now 4.4%, which they define as “total unemployed, as a percent of the civilian labor force.” It leaves out anyone who is employed in any capacity or hasn’t looked for work for four weeks. Their U-6 number, which is a bit better reflection of reality, is now at 8.6%. It includes “all persons marginally attached to the labor force, plus total employed part time for economic reasons…” It communicates that for every person actively unemployed and pounding the pavement, there is also roughly one other person who is only working part-time because he can’t find full-time employment.
But even the U6 is less than perfect. First, there is the fact that if you worked at all in the last month, you are a considered a part-time worker. The kid who mowed your lawn or shoveled your driveway last week is “employed” by the U-3 standard and a part-time employee under the U-6 standard. Then, as reported in Forbes, since 1994, BLS doesn’t even count those who have been out of a job for a year and aren’t actively looking as part of the labor force, even if they would like to work. They call them “long-term discouraged workers.” As far as the Bureau is concerned, they don’t count as unemployed.
It’s hard to determine how many people out there are long-term discouraged. What we do know is that the BLS says that the labor force participation rate, or the number of people working or looking for a job divided by the number or working age adults, is approximately sixty-three percent. It was sixty-seven percent as recently as 2001. So more people might seek work if conditions improve. Business Insider attributes as much as half of those no longer looking to an aging populace, but even if that is the case, millions of Americans are still plain missing from the BLS statistics when counting unemployment. Some estimates that include long-term discouraged workers reflect total unemployment as high as over 20%.
While the actual numbers are hard to discern, the effect is not. Millions of US citizens have given up. They are not paying taxes that they would otherwise pay. They are using resources they would otherwise not use, including social welfare benefits. To make matters worse, as the New Republic reports, it is tough for these people to move back into the job market. Many never will if things don’t improve dramatically.
It is unforgivable that the Federal government has pursued a national policy of job exportation because it benefits political donors. It is equally unforgivable that Federal policies have created conditions whereby the number of US jobs held by an immigrant has increased from one in twenty to one in six over the last thirty-five years, further driving down wages and opportunity for U.S. citizens. If the United States is to continue to be the land of opportunity, that opportunity cannot be only for business owners and immigrants. A strong middle class is vital to the maintenance of liberty, as most people prefer socialism to starvation.
In this environment, it is the duty of the government at all levels to make every effort to strengthen the U.S. job economy. President Trump recently won a national election on promises to do just that by rolling back globalism, renegotiating trade treaties, building a border wall and enforcing immigration laws. He and the GOP would be well served to keep those promises. The eventual alternative is torches and pitchforks.
