Friday, September 07, 2012

Obama's unemployment

The U.S. Labor Department announced today that the unemployment for August was 8.1%, down from 8.3% in July. However, that number is lower only because more people have given up looking for work, and only those looking for work are considered "unemployed." 

"The truth is, it will take more than a few years for us to solve challenges that have built up over the decades," Obama said in his speech at the Democrat National Convention last night. However, the increasing number of people not looking for work (and not counted as "unemployed,") is not a decades-old problem. 

Labor Force Participation Rate
As you can see, under Obama the "labor force participation rate" -- the percentage of the working-age population who are either working or looking for work -- started its sharp decline when Obama took office. The latest number is 63.5%, down from 63.7% in July and 65.7% in January 2009.  It is not a longtime problem that every President has had to deal with, nor a common occurrence. 

However, this horrible participation rate has occurred before, in our lifetimes.  The last time the participation rate was this low was in September 1981, as Reagan brought America out of the Carter recession.  At that time the participation rate was on its way up. Today, it's on its way down.  Four years of Barack Obama's policies have moved more and more people out of the workforce. 

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