They’re improving, but not for the reason that more people are finding jobs. In fact, one of the major reasons the unemployment picture looks good is because the labor participation rate has plunged to a 34 year low:
“Following the Great Recession, we’ve entered into the Great Shift,” said Bob Funk, CEO of Express Employment Professionals, and a former chairman of the Federal Reserve Bank of Kansas City. “This is a period defined by the Boomer retirement, Millennial frustration, and growing reliance on government programs. All indicators suggest this shift is not sustainable, which means we need action on everything from immigration policy to job training.
“Labor force participation is an issue too often overlooked in the headlines. We see unemployment ticking down and think things are getting better, but for the last few years, there’s been this unsettling trend that demands more focus. We have to come to terms with what it means for our economy before more damage is done,” Funk said.
In fact, it isn’t a problem of jobs. At the moment, there are 4 million jobs available according to Funk. But it is a deficit of skills which are causing a large portion of the problem:
But Boomers and Millennials alike are feeling the impact of the skills gap: the skills employers need are not the skills job-seekers possess.
This worker exodus has serious implications for America’s competitiveness, the country’s immigration policy and the survival of the social safety nets. Governments, businesses, schools and workers all have a role to play in reversing an alarming trend.
However, nothing much is being done to address the trend, with government just happy to see the unemployment numbers coming down (whether it’s a smoke and mirrors job or not, doesn’t particularly concern them) on the one side and government actually exacerbating the problem with the atrocious and job killing ObamaCare coming on line on the other. Add to that a record 8,733,461 on disability (a population the size of NYC) and you can begin to grasp the depth of this problem.
The bottom line? Today, 90 million Americans have dropped out of the job market. Until they are again engaged purposefully in looking for a job or working, we’re going to continue to see a slow recovery with the economy.