It’s at a 16-year low. So what?
The unemployment rate hit 4.3 percent in May, a 16-year low, according the Bureau of Labor Statistics’ latest jobs report. Members and proponents of the Trump administration rejoiced, celebrating the statistic as a win for America First.
“Sure pays off having a businessman in the White House!” wrote paid CNN contributor and Trump loyalist Kayleigh McEnany. Kellyanne Conway tweeted out similar support.
Too bad that this statistic does not mean much, at least without context.
Since the Great Recession, which spiked American unemployment to 10 percent, our unemployment has gradually fallen. Sinking down with it, however, is our labor-force participation rate (LFPR). The LFPR, which includes all non-institutionalized Americans over the age of 16, plateaued during the Clinton years and the first term of the Bush administration and plummeted during Obama’s tenure.
Every month of the last five years has produced an LFPR not seen since the 1980s or even the 1970s, decades when women were still gradually entering the work force. May’s jobs report listed a LFPR of 62.7 percent, down from a high of 67 percent around the turn of the century.
Trump is not unique for celebrating the unemployment rate without taking this figure into account. The New York Times lauded President Obama for “handing a strong economy to his successor,” citing the unemployment rate, despite the December 2016 LFPR being the exact same as the latest. (The New York Times headline for the latest jobs report reads, “U.S. Unemployment at 16-Year Low, but Economy’s Weak Spots Remain.” Pity.)
The unemployment rate has become a politically malleable device used to artificially bolster or condemn an administration. So what if Americans have become so discouraged with their job prospects that they increasingly live in their parents’ basements throughout adulthood?
To be sure, some of our low LFPR can be explained by an American retirement age well over a decade earlier than our average life expectancy of 79 years, combined with an aging population. Indeed, the LFPR of those age 25 to 54 has increased somewhat over the past two years — but unlike the unemployment rate, it hasn’t returned to its pre-recession level.
The strong divergence between the unemployment rate and the LFPR tells a story of discouragement. When over one out of ten men age 25 to 54 are not even looking for a job, why celebrate a low unemployment rate?
May’s unemployment rate does not include the 1.5 million Americans who wanted a job and been looking for one in the past year, but did not search in the last four weeks. It also omits the 1.45 million Americans who need work but have stopped looking for formal employment. In total, nearly 6 million Americans want jobs but are not looking for them. These are precisely the Americans who need Trump to actually make America great again rather than tweet about it.
When over one out of ten men age 25 to 54 are not even looking for a job, why celebrate a low unemployment rate?
The problems with the unemployment rate are especially clear in the international context. After all, Cuba’s unemployment rate of 3.3 percent puts ours to shame! Too bad only 42 percent of women 15 and older in Cuba work or look for work, compared with 56 percent in the United States.
Both Democrats and Republicans bear guilt for cherry-picking economic statistics when they have power. Obama lost a majority of his struggling white working-class voters to Trump, in part because of Clinton’s open resentment toward them, but also because of regulations that destroyed wide swathes of industry in non-urban areas with little diversity of industry.
Despite early, major mistakes in his presidency, Trump has an opportunity to reignite a confidence in those actually unemployed. If his policies do lead more Americans to actually look for a job and be counted in the unemployment rate, withhold your concern. That’s exactly what we need right now.
— Tiana Lowe is an editorial intern at National Review.