Morning Must-Read: Andrew Fieldhouse: 5 Years After the Great Recession, Our Economy Still Far from Recovered

Andrew Fieldhouse: 5 Years After the Great Recession, Our Economy Still Far from Recovered: “This June marks the five-year anniversary of the end of the Great Recession…

…but champagne toasts would be distastefully premature, as the U.S. economy remains far from fully recovered. The partial recovery that has materialized has been quite uneven, favoring growth of corporate profits and stock prices over employment and wage growth, while wide discrepancies persist in regional economic health…. 57 percent of surveyed American adults believed the United States was still in a recession…. Early into the recovery, roughly 11 million jobs were needed to restore the unemployment rate to pre-recession levels. Today, that number stands at an improved, but still staggering 7 million jobs needed…. The economy has added 198,000 jobs per month on average over the last year…. If this pace of hiring is sustained, it will take nearly another five years to restore pre-recession employment rates…. The unemployment rate has been an exceptionally misleading economic indicator in recent years, primarily falling because workers have been dropping out of the labor force, not because a rising share of the population is employed. The Economic Policy Institute estimates that nearly 6 million workers are still “missing” from the labor force because of the lack of jobs…. In the year before the Great Recession… 79.9 percent; in May, only 76.4 percent of prime-age workers were employed, and less than one-third of the decline from the Great Recession has been recovered…

Evening Must-Read: Jordan Ellenberg: The Summer’s Most Unread Book Is…

Jordan Ellenberg: The Summer’s Most Unread Book Is…: “Every book’s Kindle page lists…

…the five passages most highlighted by readers. If every reader is getting to the end, those highlights could be scattered throughout…. Thus, the Hawking Index (HI): Take the page numbers of a book’s five top highlights, average them, and divide by the number of pages in the whole book. The higher the number, the more of the book we’re guessing most people are likely to have read…. “The Goldfinch” by Donna Tartt: 98.5%…. “Catching Fire” by Suzanne Collins : 43.4%…. “The Great Gatsby” by F. Scott Fitzgerald : 28.3%…. “Fifty Shades of Grey” by E.L. James: 25.9%…. “Flash Boys” by Michael Lewis : 21.7%…. “Lean In” by Sheryl Sandberg : 12.3%…. “Thinking Fast and Slow” by Daniel Kahneman : 6.8%…. “A Brief History of Time” by Stephen Hawking: 6.6%…. “Capital in the Twenty-First Century” by Thomas Piketty : 2.4%…. Mr. Piketty’s book is almost 700 pages long, and the last of the top five popular highlights appears on page 26…

Evening Must-Read: Scott Lemieux: 5 Men on Supreme Court Impose Substantial Burden on Women in Illogical Decision

Scott Lemieux: 5 Men on Supreme Court Impose Substantial Burden on Women in Illogical Decision: “It is extraordinary implausible that Congress intended…

…for any bare assertion of religious conflict to trigger strict scrutiny for every federal regulation. It is proper for the courts to be highly deferential on the question of whether a litigant’s religious beliefs are sincere, but whether the burden on these beliefs is substantial is an inquiry the courts are not merely permitted but obligated to make. This inquiry should dispose of the challenge to the mandate, because in this case the burden on employers is trivial. The ACA’s regulations do not require anybody to use contraceptives contrary to their religious beliefs, and the employers are not implicated in the decision to include contraceptives as part of the package that employers must provide employees in order to maintain the tax benefits of paying employees in health insurance in lieu of wages. The triviality of the burden involved here is particularly obvious, given that Hobby Lobby covered several of the contraceptives it now challenges in its employee insurance package until 2012—an alleged burden onits religious beliefs that it failed to notice until it became convenient for a larger political purpose. That’s pretty much the definition of an ‘insubstantial’ burden…

U.S. economy trims unemployment, but more jobs growth needed

The most recent numbers on U.S. unemployment released today by the Bureau of Labor Statistics indicate that our economy is putting the Great Recession further in our rearview mirror. But more needs to be done to ensure stronger employment growth up and down the income distribution.

The U.S. economy added 288,000 jobs in June 2014 and the unemployment rate fell 0.2 percentage points to 6.1 percent, according to the most recent BLS data. The labor market added 272,000 jobs on average over the past three months and the unemployment rate declined by 1.4 percentage points over the past year.

These gains in employment were broad based as every major industry group except for two categories, nondurable goods manufacturing and other services, added jobs. The diffusion index, a measure the BLS produces to show how many industries are adding jobs, increased to 64.8 percent in June from 62.9 percent in May.

Previous drops in the unemployment rate have been troubling because they were primarily due to a drop in the labor force, but in June, the labor force participation rate was steady at 62.8 percent.

The drop in the unemployment rate this time was due to an increase in employment (407,000) along with an increase in the labor force (81,000) and the total population (192,000). The share of the population with a job increased very slightly to 59 percent from 58.9 percent. The increase was slightly larger for workers between the ages of 25 and 54— prime-age workers who are too old for school and too young for retirement—going up by 0.3 percentage points to 76.7 percent.

While these gains are promising, the state of the labor market is far from strong. The employment-to-population ratio remains almost 4 percentage points below December 2007 level of 62.7 percent. Similarly, the ratio for prime-age workers remains 3 percentage points below its pre-recession level. The labor market may have more jobs now that it did before the Great Recession of 2007-2009, but the population has increased by 14.7 million since December 2007. And there appears to be considerable slack in the labor market because wage growth has yet to accelerate.

The risk to our economy is that the current recovery is not moving with enough speed. If the current share of prime-age workers with a job becomes the new standard, then the long-run growth rate of the economy is at risk. With fewer productive workers adding their skills and talents to the economy, the economic potential of the U.S. economy will decline. The result would be a less prosperous future.

Geopolitics: The Ignatieff Who Cried “Wolf!!”: Thursday Focus for July 3, 2014

Attention Conservation:

  • (1/4) Can any professional tell me why intellectuals find it necessary that it be 1938
  • (2/4) and they be Churchill? Now I find Michael Ignatieff crying “wolf!” and calling
  • (3/4) a new cold war. Contrary to Michael Ignatieff, it is not 1938, he is not Churchill,
  • (4/4) and China and Russia are not “aglow with arrogant confidence”

Is there any professional in the house who can tell me why there are so many intellectuals for whom it is psychologically necessary that it be 1938 and they be Churchill, or 1947 and they be Orwell?

It rarely is 1938 or 1947. And even when it it does turn out to be 1938 or 1947, it is very rarely the case that you are Churchill or Orwell.

Indeed, even 1947 was not 1938.

In the days of 1947 and George Orwell the North Atlantic did not face an existential threat from rampant aggressive totalitarianism. Ingsoc–whether imposed from outside or springing up from within–was not on the possibility list. In 1938 Hitler desperately wanted war and genocide. In 1947 Stalin led an exhausted and devastated empire and, as Churchill said in Fulton, Missouri, desired:

[not] war… [but] the fruits of war

Rather, the existential threat it faced was that of overreacting and so triggering mutual assured thermonuclear destruction, rather than one of sleeping while aggressive totalitarianism conquered the world but rather.

The Soviet Union then had an economy that in the long-run delivered only 20% of the material production and 10% of the user welfare of a market economy–that paid an 80% central-planning tax. The Soviet Communist Party then was burdened by past crimes that meant that it could not allow even Solzhenitsyn and Pasternak to speak and survive. It was then weak in everything but the bravery of the soldiers of the Red Army. And it was going to stay weak in everything else except for thermonuclear reactions and rockets.

It was something that, as George Kennan knew, needed to be contained until its folly became obvious. It then needed assisted in its dissolution, and its people would then need aid. It did not need to be conquered and overthrown at the price of another world war.

Today these days it is Michael Ignatieff in the New York Review of Books who joins the Cheneyites of PNAC and company. He cries “wolf!” Or, rather, he cries:

authoritarian[s]… aglow with arrogant confidence… an alliance of authoritarian states with a combined population of 1.6 billion… from the Polish border to the Pacific, from the Arctic Circle to the Afghan frontier… a new cold war… communism… is very much alive… centralized rule with an iron fist… offer[ing] the elites of Africa and Eurasia an alternate route…. Faced with these resurgent authoritarians, America sets a dismaying example…

Here is more:

Michael Ignatieff: Are the Authoritarians Winning?: “In the 1930s travelers returned from Mussolini’s Italy, Stalin’s Russia, and Hitler’s Germany…

…praising the[ir]… common purpose… compared to which their own democracies seemed weak, inefficient, and pusillanimous. Democracies today are in the middle of a similar period of envy and despondency. Authoritarian competitors are aglow with arrogant confidence…. The recent handshake between Vladimir Putin and Xi Jinping… heralded the emergence of an alliance of authoritarian states with a combined population of 1.6 billion in the vast Eurasian space that stretches from the Polish border to the Pacific, from the Arctic Circle to the Afghan frontier….

The conflict between authoritarianism and democracy is not a new cold war, we are told, because the new authoritarians lack an expansionary ideology like communism. This is not true. Communism… as a model of state domination… is very much alive in… China and in Putin’s police state. Nor does this new authoritarianism lack an economic strategy… modernization that secures the benefits of global integration without sacrificing political and ideological control… price-fixing state capitalism… rule by (often corrupt) fiat in place of the rule of law… a claim that the Chinese and Russian civilizations are self-contained moral worlds. Persecution of gays… is intrinsic to their vision of themselves as bulwarks against Western individualism….

The new authoritarians offer the elites of Africa and Eurasia an alternate route to modern development: growth without democracy and progress without freedom… [what] some African, Latin American, and Asian political elites, especially the kleptocrats, want to hear. Faced with these resurgent authoritarians, America sets a dismaying example…. Its constitutional machinery… in the hands of polarizing politicians in Washington and in the two parties… generates paralysis…. It’s difficult to defend liberal democracy with much enthusiasm abroad if it works so poorly at home…

Things, I must say, look very different from the seats of power in Wilhelmine China than Michael Ignatieff thinks they do.

Consider a country experiencing industrialization at a pace never before seen in human history, ruled by an overcast that has lost whatever legitimate social function it ever had, greatly worried about when and how the people will demand a bigger say and a bigger share, and attempted to busy giddy minds with foreign quarrels and so entrench its authority under the banner of nationalism. Germany in 1914 or China in 2014, a century later? There were many roads to catastrophe for the German elite in 1914–it happened to choose one that drags rest of Western civilization down with it. There are many roads to catastrophe for the Chinese elite today.

Michael Ignatieff sees China’s elite as “aglow with arrogant confidence” rather than uneasy and confused, as “centralized rule with an iron fist” rather than as sitting on top of multiple volcanoes. He sees it as “offer[ing]… an alternate route” to prosperity and wealth. I see it as mired in a trackless swap. The difference in our perceptions is remarkable. It seems to me that he knows little about China. It seems to me that he knows less about the mental universe of the Chinese elite–many of whom would find it attractive to become mid-level petroleum engineers in Houston or software engineers in San Mateo, if only they could figure out how. The task is not to play into the hands of the current Chinese leadership’s shortest-run interests via helping them to busy giddy minds with war, whether hot, brushfire, or cold. The task is to help the people of China in their long-run interest of finding a path to representative government and first world-level prosperity–a long-run interest that, may I say, is as much in the interest of the grandchildren of today’s princes as of anyone else in China.

Similarly, things look very different from the seats of power in Weimar Russia than Michael Ignatieff thinks they do.

Great Russia has a very strong point when it says that promises were made in 1992 that were not kept. And Great Russia has a very, very strong point when it remembers the obligations that all of us in the North Atlantic still owe to the ghosts of the partisans of the Ukraine and Belarus, the tankers of the Red Army who drove the T-34s, the peasants who scanted their own diets to feed the tankers, and the workers of Magnitogorsk who built the T-34s. The obligations the North Atlantic acquired in 1942 and failed to properly pay forward in 1992 still burden us, and remain, and should be paid forward today.

Russia is not expansionist: its borders in Europe are roughly those of Pyotr I “The Great” Alexeyevitch Romanov, if not those of the first tsar, the dreadlord Ivan IV Vasileyevitch Romanov Rurik. It is true that Russia is trying hard to be non-contractionist. It is true that Russia is rich in resources (especially oil and gas). It is true that Russia is no longer paying the 80% tax on everything imposed by Lenin’s centrally-planned economy. But it still lacks the infrastructure and the organization needed to match the prosperity of the North Atlantic. And much of its–truly excellent–human capital investments have redounded and will redound to the benefit of the United States, and of Israel.

This is, yet again, not the place where it is in our or their long-run interest for us to assist Russia’s current leadership via helping them to busy giddy minds with war, whether hot, brushfire, or cold.

Yes, modern liberal social democracy has serious problems: voter representation, policy implementation, and ideological bias. But those who would gin up a new cold war–whether with China, Russia, or a non-existent distributed virtual Caliphate–are not helping to resolve these problems at all.

The June Household Employment Report: Morning Comment

Attention Conservation:

  • The labor market over the past year: good cyclical news
  • The labor market over the past year: a structural disaster for economic potential
  • A further 0.7%-pt decline in participation of which demography only generates 1/4.
Employment Situation Summary Table A Household data seasonally adjusted

2.1 million more adults employed than there were a year ago. A labor force smaller by 100,000 then a year ago. 2.4 million more adults not in the labor force than a year ago.

From the viewpoint of the cyclical recovery, the labor market over the past year is a small plus: the civilian employment to adult population ratio is up by 0.3%-points.

From the viewpoint of the long-run structural health of the US economy’s potential output and ability to mobilize our resources, the labor market over the past year is a disaster: a further 0.7%-point decline in the participation rate when demography would meet us to expect the decline only one quarter as large as the baby boom generation ages into retirement.

Things to Read on the Morning of July 3, 2014

Should-Reads:

  1. Mark Thoma sends us to Dietz Volrath: Pricing Power and Lower Potential GDP: “One of the results of the Great Recession has been a severe downward revision in potential GDP across many countries…. Declining measures of TFP do not necessarily imply that our ability to innovate or bring innovations to market is declining. Measured aggregate TFP can decline, or grow more slowly, even though firms are just as technically productive as before, and are innovating at the same rate as before. Instead, measured TFP growth may be slowing down because of changes in the market power of firms during the recession…”

  2. Robert Johnson: How We Broke the Bank of England:

  3. Ed Kilgore: ‘Religious Liberty’ Revisited In Hobby Lobby’s Wake: “Stepping back a moment from… Burwell v. Hobby Lobby, I am struck by the decision’s central role in the culture wars of the early 21st century. Think about it: a large swath of conservative Christendom has convinced itself (and its allies in the Republican Party) that the maintenance of religious liberty depends on a for-profit company’s ability to avoid any remote complicity in the supply of contraceptive services that according to an exotic and extra-scriptural theory of human life might risk the further development of a microscopic zygote…. Many… look sympathetically at the plaintiffs in the Hobby Lobby and Conestoga Wood cases as people who just want to be left in peace to nourish their eccentric and non-scientific views about the sacred human dignity of zygotes. But it’s impossible, of course, to divorce those views from the consequences for the affected employees…. It’s not just unbelievers who are puzzled and dismayed by Hobby Lobby. Those who ask ‘WWJD?’ and can’t imagine the Son of God fighting to protect corporate rights are largely silent witnesses of all the Christian Right celebrations over this decision…”

Should Be Aware of:

And:

  1. Jörn-Steffen Pischke: Weak Instruments: “y(i)=βx(i)+η(i) (structural equation); x(i)=πz(i)+ξ(i) (first stage)…. If π is truly zero… variation in x-hat(i) in the sample just comes from ξ(i). So, the variation in x-hat(i) is no different from the variation in x(i), and hence OLS and 2SLS have to estimate the same quantity on average. If π is not truly zero but F is small, then 2SLS will be biased towards OLS.”

  2. John Judis: Supreme Court Hobby Lobbing Ruling Could be a Boon for Democrats: “In July 1989, the court handed down Webster…. The right to abortion became a hot issue in the 1990 elections… abortion-rights supporters came out ahead…. Lawton Chiles defeated incumbent Republican Governor Bob Martinez… Ann Richards defeated… Clayton Williams…. There was no gender gap between male and female supporters of Democratic congressional candidates in 1988. In 1990, gender gap was ten percentage points–the highest ever…. If Webster improved Democratic chances in 1990… Burwell… could prove a boon to Democrats. Abortion rights remain controversial but contraception is not…”

  3. Dahlia Remler: Casey Mulligan Worships Market Icons and Denounces Apostate Health Economists: “Leaving the plenary furious, I wondered if I was seeing Mulligan through partisan eyes…. I decided to ask conservative health economists… what they thought… a sample size in the single digits. The consensus… ‘same stuff over and over again’ and ‘not a lot of content’. The most complimentary responses were: ‘he didn’t explain very well’ and ‘there was a lot to be conveyed, but it didn’t happen’…. Mulligan… dismissed [Sarah Kliff]… saying that that he does not ‘blame’ journalists for ‘not doing market analysis’, because ‘their job is to sell newspapers’…”

  4. Ben Chabot:Is there a trade-off between low bond risk premiums and financial stability?: “It has been suggested that financial instability may be more likely following periods of low bond market risk premiums. The timing of past episodes of instability casts doubt upon the hypothesis that low levels of risk premiums sow the seeds of future instability…”

  5. A Philosophical Profile of Elizabeth Anderson: “

Already-Noted Must-Reads:

  1. Noah Smith: Austrian Economists, 9/11 Truthers and Brain Worms: “The Austrian worldview is like a brain worm that has infected large swathes of our financial industry, commentariat and general public…. When the Austrian brain-worm invades, you start believing things like: 1) Federal Reserve money-printing is a government plot to boost big banks, 2) prices are rising much faster than anyone thinks, 3) real ‘inflation’ means money-printing, not an increase in prices, 4) printing money can never boost the economy, 5) academic economics is a plot to use mathematical mumbo-jumbo to cover up government giveaways to big banks, etc., etc…. The years 2011 and 2012 were to Austrians like sunrise is to a vampire. It was simply amazing to sit there and watch Austrians writhe and contort under the pure, burning light of extant reality. Massive torrents of Fed ‘money-printing’ failed to budge prices; this fact directly cracked the central foundations of Austrian thought…. How did Austrians deal with this assault by the forces of extant reality?…. They attempted to deny it…. They redefine[d] reality…. You can define inflation to be a rare poisonous South American tree frog if you want, and the only consequence will be that people think you’re off your rocker…. But brain worms have a way of just burrowing deeper to escape the light, and my Twitter feed is still occasionally hijacked by true believers screeching that inflation really is off the charts, that I’m a corrupt spokesman for big banks and government overlords…. If you’re one of the people who has been fully or partially enslaved by this brain worm, I implore you: Resist…. I don’t expect many of you to heed my call, but a couple of you will…. That’s how brain worms get defeated–a few minds are liberated, and then a few more, and then a few more…”

  2. Nevermind the headlines tomorrow s jobs report is all about discouraged workers The Washington PostMatt O’Brien: Nevermind the headlines, tomorrow’s jobs report is all about discouraged workers: “Is the stronger labor market bringing back discouraged workers?… The Great Recession didn’t just create an unemployment crisis. It created a shadow unemployment crisis, too. These are the millions of Americans who want a job, but have given up hope of finding one. That means they’re not officially ‘unemployed’, because they’re not actively looking for work, but they de facto are. The question is whether they’ll come back to the labor market now that it’s looking better. As you can see below, that’s historically what has happened…. That’s why you should pay almost as much attention to how much the labor force grows—if it does—as you do on how much employment grows…”

Burwell vs. Hobby Lobby and the Decay of Welfare Capitalism: Wednesday Focus for July 2, 2014

Back in the 1920s the Progressive-Republican founder of The 20th Century Fund–now The Century Foundation—-Edward Filene argued that America did not need any flavor of “socialism”. What it needed instead, he argued, was “welfare capitalism”.

Socialism imposed heavy taxes and used the resulting revenue to provide for social welfare. In so doing it incurred all the efficiency losses of bureaucracy. It added to those the losses from coalition-building political logrolling. It added on to those the efficiency losses that ensued from decisions made by politicians responsible to voters who were by and large not the entrepreneurial job creators. More important, in his view, the redistributive part of the social insurance state was simply not necessary. The efficiencies of scale of modern mass production would guarantee that even an unequal society would be a society of general abundance and prosperity.

And most important, in Edward Filene’s view, the “state” part of the social insurance state was unnecessary. The large corporations that employed the industrial working class and that were the future of America could do all the risk-pooling that was desirable and all the purchase-pooling that was necessary. Businesses could act as risk-spreading and purchasing agents for their workers and their social insurance benefits. In so doing, Edward Filene thought, they would avoid the efficiency losses from excessive bureaucracy, from logrolling and coalition-building, and from putting politicians rather than managers in charge. And they would harness the benefits of competition as well. “Welfare capitalism” would thus be more efficient and effective than “socialism”. Firms would no more seek to be inefficient as social-insurance purchasing agents for the principals that were their workers than firms would seek to be inefficient at production.

In Edward Filene’s vision, the welfare-capitalism of America’s large highly-efficient mass-production firms would see those firms performing two roles. In their role as producers, firm owners and managers would employ workers, and owners and managers would be the principals: they would take the risks and reap the profits of entrepreneurship and enterprise. In their role as benefit purchase agents, firm owners and managers would work for their workers and their families, and would be the agents of the workers.

One of the most interesting thing about Burwell vs. Hobby Lobby is that there are now five justices on the Supreme Court whose understanding of the employer-employee relationships is not “welfare capitalist” but is, I must say, positively medieval. The pooling provided by firms in benefits provision is no longer seen as the firm’s acting as a benefits-purchasing agent for the workers. The nexus of contracts that is the firm is no longer seen, in this role, as the agent of the workers–and thus as an instrumentality the workers use to exercise their right to pursue happiness as they choose. Instead, the firm’s provision of benefits is seen as a free gift from the owners and managers to the workers. Thus the liberty interests that are worth preserving are not workers’ interest in being provided with a benefits package that fits their situation and their values, but rather bosses’ liberty interest in specifying the terms of the free gift of benefits that they give their workers.

Thus, in the eyes of Sam Alito and his four Horsemen, we are really not talking “welfare capitalism” any more: we are–literally–talking industrial neo-feudalism.

Now this may be making much of the decision that is Burwell vs. Hobby Lobby. The decision may simply be based on the fundamental legal principle that when the sect to which five of nine justices belong claims that any burden whatsoever is ipso facto undue, than any burden is ipso facto undo. But even from the perspective of the sexual politics of the Roman Catholic hierarchy, Hobby Lobby is a very strange ditch to choose to die in. The center of gravity of the Vatican right now, is no longer the conservative prosperous first-world middle class of Italy or Germany or even Poland, it is the poor of Argentina. Having one’s rhythm method contraception fail and having an extra mouth in the household to feed is of more import and weight in a place where zero population growth is still far off and where the margin between the household’s income and its basic food budget is not that large. The first-world sexual politics focus that has absorbed the Vatican since Pope Paul VI does not seem high on the priorities of Pope Francis.

One can only even start to make sense of Burwell vs. Hobby Lobby by beginning with the decay of “welfare capitalist” doctrine–by forgetting that Edward Filene’s Progressive-Republican vision in the 1920s was one in which firms faced both directions, both working for workers in getting workers social-insurance benefits, and having workers work for firms in providing labor.

Afternoon Must-Read: Noah Smith: Austrian Economists, 9/11 Truthers and Brain Worms

Noah Smith: Austrian Economists, 9/11 Truthers and Brain Worms: “The Austrian worldview is like a brain worm…

…that has infected large swathes of our financial industry, commentariat and general public…. When the Austrian brain-worm invades, you start believing things like: 1) Federal Reserve money-printing is a government plot to boost big banks, 2) prices are rising much faster than anyone thinks, 3) real ‘inflation’ means money-printing, not an increase in prices, 4) printing money can never boost the economy, 5) academic economics is a plot to use mathematical mumbo-jumbo to cover up government giveaways to big banks, etc., etc…. The years 2011 and 2012 were to Austrians like sunrise is to a vampire. It was simply amazing to sit there and watch Austrians writhe and contort under the pure, burning light of extant reality. Massive torrents of Fed ‘money-printing’ failed to budge prices; this fact directly cracked the central foundations of Austrian thought…. How did Austrians deal with this assault by the forces of extant reality?…. They attempted to deny it…. They redefine[d] reality…. You can define inflation to be a rare poisonous South American tree frog if you want, and the only consequence will be that people think you’re off your rocker…. But brain worms have a way of just burrowing deeper to escape the light, and my Twitter feed is still occasionally hijacked by true believers screeching that inflation really is off the charts, that I’m a corrupt spokesman for big banks and government overlords…. If you’re one of the people who has been fully or partially enslaved by this brain worm, I implore you: Resist…. I don’t expect many of you to heed my call, but a couple of you will…. That’s how brain worms get defeated–a few minds are liberated, and then a few more, and then a few more…

Afternoon-Must Read: Matt O’Brien: Tomorrow’s Jobs Report Is All About Discouraged Workers

Nevermind the headlines tomorrow s jobs report is all about discouraged workers The Washington Post

Matt O’Brien: Nevermind the headlines, tomorrow’s jobs report is all about discouraged workers: “Is the stronger labor market bringing back discouraged workers?…

The Great Recession didn’t just create an unemployment crisis. It created a shadow unemployment crisis, too. These are the millions of Americans who want a job, but have given up hope of finding one. That means they’re not officially ‘unemployed’, because they’re not actively looking for work, but they de facto are. The question is whether they’ll come back to the labor market now that it’s looking better. As you can see below, that’s historically what has happened…. That’s why you should pay almost as much attention to how much the labor force grows—if it does—as you do on how much employment grows…