Behind the Numbers: People leaving the workforce means unemployment is down

Behind the Numbers: People leaving the workforce means unemployment is down

Diana Furchtgott-Roth
Washington Examiner
Feb 5 2011

Friday's employment report from the Labor Department brought bad news for economists as well as for America. Economists thought that the January unemployment rate would rise from 9.4 percent to 9.5 percent--it fell to 9 percent. They thought that the economy would create 148,000 jobs in December, whereas the number announced Friday is 36,000.

One reason the unemployment rate fell is that the civilian labor force declined by half a million last month as discouraged workers left the labor force. With fewer workers in the labor force, the unemployment rate is lower. The labor force participation rate continued its downward trend, from 64.3 percent in December to 64.2 percent in January, and is now at the lowest level since March 1984.

The Labor Department's broadest measure of unemployment, which includes discouraged workers and those working part-time when they want full-time jobs, stands at 16.1 percent.

The administration and Congress needs to focus on job creation. This means reducing government spending and doing away with burdensome regulation, such as the Environmental Protection Agency's plans to regulate carbon and the Labor Department's plans to impose additional burdens on employers.

With the tension in the Middle East, how about resuming the issuance of permits for oil drilling in the Gulf, which is causing the loss of thousands of jobs in Gulf states?

Examiner columnist Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.

Honestly, it is not like job-creation is rocket-surgery.

This moron we call President has done everything he could to KILL jobs! He has attacked private-sector businesses at every turn, passing one job killing bill after another without a thought to what that is doing to the American people. The so-called "stimulus" bill which was nothing more than a giant pork-barrel bill wasting nearly a trillion dollars on Democrat's pet projects, the massive new taxes and regulations contained in Obamacare, not to mention in the "financial reform" bill. And on top of that he tried to pass "cap-and-trade" which would cripple job creation even more dramatically than all his other measures (and he is now trying to enact it through regulatory means through the EPA), and the "card-check" bill which would allow unions to use strong-arm tactics to expand on a huge scale, creating even more disincentives to be in business. Then he pulls the bone-headed move of shutting down all oil drilling in the gulf.

I mean, it's like this guy is a one man wrecking machine when it comes to private-sector business growth and job creation. He has created so much uncertainty for private-sector businesses and expressed so much hostility toward them that it's a small miracle that we have any left her. And yes, that's a bit of hyperbole, but not by that much!

Higher taxes, more oppressive and burdensome (and unnecessary) regulations and laws, more hurdles one has to surmount, just to stay in business - forget about growing - that is what this President has done for our economy.

Nothing could be easier to fix, but our Federal government is clearly not interested in fixing it - certainly not Obama and the Democrats on the Hill.

Wait until they try the previous Labour government's trick of putting long-term unemployed on training courses so that they can be classed as "students".

The_Amber_Spyglass wrote:Wait until they try the previous Labour government's trick of putting long-term unemployed on training courses so that they can be classed as "students".

I'm not going to bet against a move like that...

What do they do when the finally finish those courses and rejoin the ranks of the unemployed?

Well there will always be people going on these courses, as one group finishes another lot will take them up, so in effect it is a way of keeping the unemployment figure down by perhaps a few hundred thousand at every quarterly measurement. In order to go on such a course they had to be unemployed over a certain time period (say... 12 months) and have very few qualifications and/or work experience.

I'm all for it if it gives people real and tangible qualifications and opportunity to find work, but I do not like the way it was used (and probably still is) to manipulate actual unemployment figures.

Yeah, I'd be fine with something like that if it really helped... but here at least, it would be more or less useless as the jobs just aren't out there... not in enough volume to make even a tiny dent in the unemployment rate.