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Wednesday, January 27, 2010

Unemployment


I've been tracking various subcomponents of unemployment for the past year, and just updated things before my "Principles of Macroeconomics" class devoted to what unemployment is and how it's measured. In the process, I found I'd not included recent data on the decline in labor force participation. The numbers are disheartening: the good months during 2004-2008 had 66.2% of the working age population in the labor force; that's now down to 64.6%, a change of 1.6 percentage points. Since the relevant target group is some 237 million people, that comes out to 3.7 million individuals who've "dropped out" on top of those 15.3 million unemployed. And note that the base may skew things: 10 years ago, 67% of people were in the labor force.

Mike Smitka