Perhaps we should be happy that the Washington Post has finally noticed that the labor force has rapidly eroded during the so-called recovery in the Barack Obama presidency, but they still seem to have trouble with the data. Friday’s jobs report for March 2013, with its below-population-growth level of 88,000 jobs added and the exodus of 496,000 more workers from the labor force shocked everyone out of the post-election complacency, and the Post sends out a long-overdue APB:
Put out an all-points bulletin: Millions of Americans have gone missing from the workforce.
Every month that those would-be workers are gone raises the odds that they might never come back, dimming the prospects for future economic growth. …
The Labor Department reported that the U.S. labor force — everyone who has a job or is looking for one — shrank by 500,000 people in March. That brought the civilian labor force participation rate to 63.3 percent in March, its lowest level since May 1979. And it left the workforce several million members smaller than the Congressional Budget Office estimates that it should be, given the nation’s demographics.
So far, so good — except that the Post tries to sell this as a decade-long trend:
The vanishing trend is more than a decade old, but it accelerated during the Great Recession. Throughout 2012, economists held out hope that it had stopped. But then came Friday’s jobs report, and hopes were dashed.
There’s so much false information in that paragraph that even the “the” and the “but” are suspect. For the record, here is the actual decade-long trend from the Bureau of Labor Statistics, which is the official record-keeper of this metric:
First, it’s very clear that the trend downward didn’t begin ten years ago. For the first six years of the last decade, the civilian labor force participation rate stayed nearly level in the 66% range. It didn’t start dropping below that level until the last quarter of 2008.
However, it didn’t really start accelerating until six months into Obama’s term. That’s about the same time that the Great Recession officially ended — June 2009 — and the technical recovery began. At that point, the CLFPR was 65.7%, just a tenth of a point below January 2005’s 65.8% and exactly what it was when Obama took office. In the three years and nine months since, it has plunged two and a half points to 63.3%, the lowest it’s been since Jimmy Carter’s presidency.
With that data presented, let’s see a show of hands among economists who “held out hope” that the trend had “stopped.” Let’s also see the show of hands among those economists who thought the trend started in 2003. I’d ask for a show of hands from the Washington Post’s layers of fact-checkers and editors who vetted that claim against the actual data, but it’s clear that none of them bothered. Apparently, they were so concerned about not hanging the blame for this on the Obama administration that fact-checking just slipped their minds.
They’re also perplexed about the demographics of the slide:
Perplexingly, the driving force behind the decline does not appear to be baby boomers beginning to retire, an event economists have long predicted would shrink the size of the workforce. It’s people in the prime of their working years, ages 25 to 54, who began tumbling out of the job market in the early 2000s and have continued to disappear during the recovery.
Why might that be? Could it be that the crash damaged retirement accounts badly enough that seniors put off retirement plans and held onto jobs longer than expected? Could it be that increases in the cost of hiring — say, ObamaCare and other regulation — made employers less likely to take risks with younger workers, and that the cost of hiring older workers came down when the jobs market tanked?
Don’t ask the Washington Post or its economists. They don’t seem to have a grasp of the data, let alone the problem:
Economists have ideas but not all the answers.
“Prime-aged people are working less, and we don’t know why,” said Betsey Stevenson, a labor economist and associate professor at the University of Michigan. “I get concerned because there are a lot of people who have useful and productive skills that could really contribute to the economy, and we’re just failing to find ways to get them involved.”
Maybe the Post can find those answers if they start off by looking at the data.
Update: One commenter notes that the Post called this trend “more than a decade old,” but as the same commenter points out, that’s still a false argument. Let’s look at the trend over 34 years, since the last time we saw 63.3% participation rate:
The bump to over 67% came during the dot-com bubble in the late 1990s. The overall trend after the Reagan recovery had the participation rate in the low-to-mid-66% range until the end of 2008. And once again, we see the falloff not as a “trend,” but as a plunge that has almost entirely taken place during the so-called “recovery” of Obamanomics.
Update II: Jim Tankersey and I debated this on Twitter a few minutes ago. Kudos to him for engaging, but he’s arguing that the trend between 2000-3 is more significant than the 2009-present decline, which is simply absurd. Be sure to read our Twitter feeds (mine is here).
Update III: Or heck, just go to Big Gator’s feed here to pick it all up … since he started the fight in the first place. Bad Gator!