Trump, Obama: On Taking Credit for Labor Markets

All presidents claim credit for good labor markets. The unemployment rate is the one measure that the public keeps in mind. But there is more.

A more significant measure is “labor force participate rate.” Boiling it down, it’s the percentage of able-bodied people 16 years of age and older who are employed 15 or more hours or are looking for a job.

Two keys group are the “long term unemployed” and the person who has quit looking for work (so-called discouraged worker). That’s usually a bad place to be for that person, and it has strongly negative implications for society.

In December 2017, our nation’s "labor force participation rate" was 62.7 percent. 
Compare that to 62.9% in January 2017-- Obama's last figure.

It’s hard for presidents to affect this rate, and that’s really true in the short run.

Whomever is president, it’s important that their policies encourage people to rejoin the labor force.

The chart shows that the LFPR peaked right around 9/11, at about 67%.

Interesting to note, it rose steadily from the early 1970s through 2001, likely because women were more inclined to look for employment.

It has trended down since that time.

President Obama’s eight-year term lowered unemployment, but did nothing measureable to halt the slide in the LFPR—until about 2015, when the rate stabilized at about 63%. In other words, people who were actively looking for work were more successful as the Obama recovery slowly took hold. But overall, almost 40% of the population stayed on the sidelines.

That's horrible.

That rate is similar to the 1970s, a period of deep economic doldrums.

These $1,000 pay bonuses are a good thing. Will they bring people off the sidelines? Probably not. What is needed is job training, access to community colleges, and similar programs that help link employers and long-term unemployed people.