Population Growth Outpaces Jobs

Source: Bureau of Labor Statistics Labor force participation, by percentage of the adult population.

Not a good morning for the employment report.

The share of American adults with jobs fell slightly to 58.6 percent in August as population growth outpaced job growth.

The United States is more than four years into a recovery so weak that this “employment rate” has not recovered at all. As I noted last month, 63 out of 100 adults had jobs before the recession. Now 59 do.

The unemployment rate continues to decline because a growing share of the nonworking population is not even trying to find jobs. Some policy makers argue that the unemployment rate is a more accurate barometer of economic conditions because it’s impossible to tell how many of the larger group of those not working actually want jobs, and how many don’t.

Others say reversing the trend is beyond the power of short-term measures like the Federal Reserve’s monetary stimulus.

But these views only raise further questions: Why are more Americans choosing not to work? What kinds of government policies might be able to reverse the trend? And, if we cannot, what are the long-term consequences for our nation’s fiscal and economic health?