The U.S. labor force is shrinking, as more Americans are giving up hope
By Chris Isidore (CNNMoney): Last month, only 58.1% of Americans age 16 and over were employed, a significant drop from before the recession and the lowest since 1983.
That’s especially worrisome to economists, who say a steady increase in those dropping out of the work force and not being counted in the unemployment rate is disguising just how bad the labor market really is.
“People are dropping out of labor force for all types of reasons,” said Robert Brusca of FAO Economics. “And it’s not a good trend. A good part of the wealth of a nation has to do with the proportion of population that works.”
Some economists say that the employment-population ratio, or “e-pop,” is a more accurate snapshot of the labor market than the unemployment rate, which fell to 9.1% last month from 10.1% in October 2009.
“When we have a time when the labor force is not growing normally, e-pop provides the cleanest assessment of what is going on in the labor market,” said Heidi Shierholz, a labor economist with the Employment Policy Institute, a liberal think tank. “What you see is from ’07 to ’09 — it fell off a cliff, and it hasn’t recovered since then.”
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