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The alarming employment trends that the jobs report won't tell you
https://www.cnn.com/2019/10/03/perspectives/jobs-report-employment-data/index.html
The US economy has experienced growth for about a decade. Yet the share of the population that is employed or seeking work has trended down for the last two decades. Many regions within the United States have an alarmingly high percentage of people who are not employed or actively looking for a job. We find this to be troubling, since the labor force participation rate serves as a fundamental marker of the economy's performance. Increasing participation in the labor force can play a critical role in raising living standards of the country overall.
In a new study published by The Hamilton Project at the Brookings Institution, we found that some of the decline in labor force participation can be attributed to either the aging population heading toward retirement or young people who are increasingly at school rather than work. However, we are more concerned with the low levels of participation among groups in the 25- to 54-year-old population that face barriers to labor market opportunity: people without college degrees (78%), women (75%) and black men (83%), among others.
Even more alarming, the Hamilton Project's Economic Vitality Index (which measures income, employment, poverty, life expectancy and housing data to determine whether a county is struggling or succeeding) reveals dramatic differences in labor force participation among various parts of the country.
For example, counties ranking in the top 20% of economic vitality — like Chester County, Pennsylvania and Livingston County, Michigan — have an average prime-age (25 to 54 years old) labor force participation rate of about 86%. That's pretty high. Conversely, those counties ranked in the bottom fifth of vitality — like Fayette County, Pennsylvania and Montcalm County, Michigan — have a prime-age labor force participation rate of about 72%, on average. This is a significant difference by any measure, considering that during the Great Recession and its aftermath, the national average labor force participation fell by roughly 3 percentage points to a low of 80.6% in October 2013.
While there have always been large gaps in economic performance across regions of the United States, those gaps have become increasingly locked in place over the last few decades. In the first 80 years of the 20th century, poorer places tended to grow faster than wealthier places, partly because labor productivity rose faster in places that started at lower levels and partly because Americans were more geographically mobile back then. Those without work were able to move to places with more opportunity. While some regions certainly featured more economic opportunity than others, the differences were narrowing over time. However, since the early 1980s, the gaps across regions have become increasingly entrenched.
The US economy has experienced growth for about a decade. Yet the share of the population that is employed or seeking work has trended down for the last two decades. Many regions within the United States have an alarmingly high percentage of people who are not employed or actively looking for a job. We find this to be troubling, since the labor force participation rate serves as a fundamental marker of the economy's performance. Increasing participation in the labor force can play a critical role in raising living standards of the country overall.
In a new study published by The Hamilton Project at the Brookings Institution, we found that some of the decline in labor force participation can be attributed to either the aging population heading toward retirement or young people who are increasingly at school rather than work. However, we are more concerned with the low levels of participation among groups in the 25- to 54-year-old population that face barriers to labor market opportunity: people without college degrees (78%), women (75%) and black men (83%), among others.
Even more alarming, the Hamilton Project's Economic Vitality Index (which measures income, employment, poverty, life expectancy and housing data to determine whether a county is struggling or succeeding) reveals dramatic differences in labor force participation among various parts of the country.
For example, counties ranking in the top 20% of economic vitality — like Chester County, Pennsylvania and Livingston County, Michigan — have an average prime-age (25 to 54 years old) labor force participation rate of about 86%. That's pretty high. Conversely, those counties ranked in the bottom fifth of vitality — like Fayette County, Pennsylvania and Montcalm County, Michigan — have a prime-age labor force participation rate of about 72%, on average. This is a significant difference by any measure, considering that during the Great Recession and its aftermath, the national average labor force participation fell by roughly 3 percentage points to a low of 80.6% in October 2013.
While there have always been large gaps in economic performance across regions of the United States, those gaps have become increasingly locked in place over the last few decades. In the first 80 years of the 20th century, poorer places tended to grow faster than wealthier places, partly because labor productivity rose faster in places that started at lower levels and partly because Americans were more geographically mobile back then. Those without work were able to move to places with more opportunity. While some regions certainly featured more economic opportunity than others, the differences were narrowing over time. However, since the early 1980s, the gaps across regions have become increasingly entrenched.
The key points here are the regional differences. Some cities have all the jobs. Some rural counties are quite the opposite. Some people can't move because of various reasons, and are left out. Having high employment and jobs nationwide hides the local unemployment in many areas across this country.
A related issue is the cost of living. Rents are higher in cities with lots of jobs so workers might be saving less or having multi-hour commutes.
