MAR 4, 2016 5:30 PM EST
By Justin Fox
According to today’s employment report, 59.8 percent of Americans ages 16 and older had jobs in February. That’s the highest employment-to-population ratio in years, and the rate of increase is clearly on the rise.
Look back some more years, though, and the story is different. The recent gains are real, but by the standards of the past few decades, a 59.8 percent employment-to-population ratio isn’t impressive.
Let this be another lesson in how the presentation of information shapes our understanding of it. The second chart paints a gloomy picture — the picture that Donald Trump may be referring to when he says the true unemployment rate is 40 percent or higher. A 59.8 percent employment-to-population ratio means that 40.2 percent of American civilians 16 and over don’t have jobs. That percentage includes high-school students, 100-year-olds and lots of other people who don’t want or need jobs, so the true unemployment rate clearlyisn’t 40 percent. Still, in April 2000 the employment-to-population ratio peaked at 64.7 percent. Now it’s significantly lower. What’s going on?
The answer that I keep gravitating to is that despite the 4.9 percent unemployment rate, the job market is still pretty weak, and probably malfunctioning in some way. This isn’t the only possible answer. In 2014, for example, two economists at the Federal Reserve Bank of New York divided people responding to the Census Bureau’s Current Population Survey (from which the unemployment rate and the charts in this article are derived) into 280 cohorts defined by “birth, sex, race/ethnicity, and educational attainment.” They determined that most of the decline in the employment-to-population ratio since 2000 could be explained by the changing makeup of the population.
But demographics aren’t destiny. The employment-to-population ratios by age group, for example, have changed a lot since 1990. First, the women:
https://www.bloombergview.com/articles/2016-03-04/why-aren-t-more-americans-working
