The most recent jobs data show that more Americans are getting off the sidelines and going back to work. This is great news! The US economy added another 213,000 new jobs last month. The economy has added an average of about 250,000 new jobs each month this year.
The unemployment rate rose modestly to 4.0% from 3.8% in May, only because more people started actively looking for work. According to the Labor Department, if you are not looking for work, you are not counted as unemployed. Since more people are now actively looking for work, the unemployment rate ticked up a bit in June.
Here’s an interesting related story.
President Trump’s daughter and senior advisor, Ivanka Trump, recently commented publicly that people formerly unemployed are returning to the workforce in increasing numbers. Yet the Washington Post’s “Fact Checker,” Meg Kelly, claimed Ms. Trump was wrong and awarded her two “Pinocchios” for saying that more people were returning to the workforce.
The Wall Street Journal’s Assistant Editor James Freeman suspected that Ms. Trump was probably correct, so he did a little homework and quickly confirmed that she was indeed accurate. So he called out the Post’s Fact Checker for stating her opinion rather than fact. This happens quite frequently in the mainstream media which despises the Trumps.
Here is Ms. Trump’s actual statement. “I think one of the tremendous opportunities that we’re seeing, because the economy is so strong, is that people who have been out of the workforce are coming back off the sidelines. And this is something we are working incredibly hard to incentivize, because there is a large population of prime-age men and women who are out of the workforce and who are now, slowly, starting to return.”
The US Bureau of Labor Statistics (BLS) reports employment rates for different demographic groups each month. One popular measure of the overall jobs situation is the “Employment to Population Ratio.” This measures the ratio of currently working Americans with the total working-age population available for work.
Take a look at the BLS’s latest Employment Population Ratio table, which shows that Americans of various demographic groups are returning to the workforce:
The data in the table above clearly confirm that employment is increasing for all the demographic groups shown, whereas it declined for all these groups from the Great Recession to 2016. The same was true for Asians and most other minorities over the same periods.
Although the unemployment rate declined between 2008 and 2016, had the labor-force-participation rate in 2016 remained at its 2008 peak level, the unemployment rate would have been considerably higher. Yet millions of Americans simply dropped out of the labor force altogether in the wake of the Great Recession.
The unemployment rate is measured as a share of people either working or actively looking for work, so when unemployed people drop out of the labor force, the unemployment rate drops — but the Employment to Population Ratio does not.
Since 2016, unemployed people have reentered the labor force — driving labor-force participation up in virtually all groups. The difference this time is that many of those people have actually found jobs, as opposed to looking unsuccessfully. As noted above, the unemployment rate rose in June only because more people started actively looking for work.
Ivanka Trump discussed the challenge of “incentivizing” people to return to work. Not only have there been positive policy changes since 2016 (not that the mainstream media would acknowledge it), but survey evidence also suggests that people’s overall attitudes toward work are changing.
When all demographic groups show identical trends, and there is an across-the-board reversal in the data, the statistical case that something significant has happened is overwhelming. People’s attitudes toward work have changed for the better. Not only is work getting easier to find, but it also appears there is a greater choice of jobs available.
It is also noteworthy that the biggest drops in labor force participation between 2008 and 2016, and the biggest rises since, were for Blacks and Hispanics. In fact, the unemployment rate today is the lowest on record for Blacks and Hispanics. That is terrific news!
Yet we hear little about this in the mainstream media, including the Washington Post which claimed that Invanka Trump’s assertion was simply false. The Post offered no source for their assertion that Ms. Trump was wrong. My guess is that they were confident no one would fact-check their fact-checking.
They were wrong on both counts. What else is new? They owe her an apology, but don’t hold your breath.
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