With thanks to the Economic Policy Institute and the Pew Research Center, here’s a chart that explains why all the job-creation of the latest employment reports — more than 200,000 added in the last month’s accounting by the Labor Department — isn’t making the American economy feel so resurgent.
“The U.S. finally — after six and a half years — has more jobs than it did before the housing crash and subsequent global financial crisis cratered the economy,” Pew notes: 138,463,000 nonfarm payroll jobs in May, “surpassing the pre-recession peak of 138,365,000 in January 2008.”
Yet there are about 15 million more working-age people now than in January 2008. Looking at “the participation rate,” only 58.9 percent of American adults are employed, four percentage points below January 2008. That leaves the economy still seven million jobs shy of what it would take for the rate to equal pre-recession levels of employment, the EPI chart below shows.
The EPI’s Heidi Shierholz calls the attainment of pre-recession job levels “an utterly meaningless benchmark economically. Because the working-age population (and with it, the potential labor force) is growing all the time, we should have added millions of jobs over the last six-plus years just to hold steady. That means that when we get back to the prerecession employment level, there will still be a huge gap in the labor market. We currently have a gap in the labor market.”
— Economic Policy Inst (@EconomicPolicy) June 6, 2014