The “official” unemployment rate has fallen to 6.7%, compared to an average unemployment rate of 5.3% under Geroge W. Bush. Four years after the “official” recovery from the recession in 2009, the unemployment rate has finally dropped below 7%. So, does this mean the “recovery” has finally reached the working man?
To put it bluntly, NO.
The employment participation rate dropped heavily due to the recession. Since then it has remained near that lower level. The percentage of Americans who are employed not only fell, but has remained depressed.
How, then, can the unemployment rate keep on dropping? Simply that the official unemployment rate only includes those who are currently looking for a job — those who have dropped out of the workforce are no longer counted. If the unemployment rate was measured using the pre-recession employment participation rate, it would be above 10% today, and every day since the recession official ended.
How bad is it? Nearly 92 million working age Americans are not in the labor force.
And that number grows every day…