Sunday, September 9, 2012

Labor Participation

The American Enterprise Institute has a great post on the latest jobs report including the graph above they grabbed from the Buearue of Labor Statistics. Even if you click through to the source data, the massive drop of in labor participation during the last recession is hard to comprehend. Since then there has been almost no uptick, with the labor force persisting between 58% and 59% of the population which is the level we first achieved back in the mid 1970s. While it's typical for labor participation to drop during recessions, the magnitude of this past drop and the lack of an immediate rebound afterwards shows just how much more extreme this recession is compared to others over the past 50 years. Unfortunately, the BLS data doesn't seem to go back to the time of the great depression, so it's hard to see if the pattern we are seeing today mimics this other much more intense period of economic adjustment, but I would suspect that you would see more similarity than difference.

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