Investor’s Business Daily (06/05/12) David Hogberg
While the jobless rate officially stands at 8.2%, actual employment rates of core working age Americans suggest the true jobs situation is even worse. From mid-1987 until the recent recession, the employment-to-population ratio of 25- to 54-year-olds usually ranged from 78.5% to 80%. It never fell below 78.2% even during the 1990-91 and 2001 slumps. Now, three years after the recession ended in June 2009, that ratio stands at just 75.7%.
“This is probably a better measure than the unemployment rate,” says James Sherk, senior policy analyst in labor economics at the conservative Heritage Foundation. “There are so many people dropping out of the job market and the unemployment rate, bad as it is, doesn’t pick that up. The ratio gives a better idea of employment opportunities.” Heidi Shierholz, an economist at the liberal Economic Policy Institute, says the employment-to-population ratio “sidesteps a lot of structural issues, like baby-boomers retiring. You are looking at prime-age workers and it gives you a better sense of the weakness in our current job market.” In the past few months the core employment-to-population ratio has improved, rising from 74.8% in October 2011 in part due to an unseasonably warm winter.