As Kevin detailed this morning, the economy added just 74,000 jobs last month and the official unemployment rate dropped to 6.7 percent. This drop is a direct result of Americans giving up the search for work. Since President Obama took office in 2009, nearly 10 million people have left the work force and millions more remain underemployed.
The Economic Policy Institute [EPI] has developed a series of charts to visually show how many workers are missing from the labor force and estimated in December 2013 that 5,990,000 workers were missing. When missing workers are calculated into unemployment numbers, the rate is 10.2 percent, nearly four percent higher than the official Labor Department rate.
"In today’s labor market, the unemployment rate drastically understates the weakness of job opportunities. This is due to the existence of a large pool of “missing workers”—potential workers who, because of weak job opportunities, are neither employed nor actively seeking a job. In other words, these are people who would be either working or looking for work if job opportunities were significantly stronger. Because jobless workers are only counted as unemployed if they are actively seeking work, these “missing workers” are not reflected in the unemployment rate," the EPI website states.
"This is comparable to losing the state of Maryland or Missouri in terms of productivity and GDP. We are missing between $250 and $300 billion in lost GDP because of these jobs losses, which is right around 1.5 to 2% of GDP growth. Same number that has been historically missing from Obama's stewardship of the economy," Townhall Finance Editor John Ransom says. "And things are getting worse. The missing workers in August of 2012 were 4.4 million. Now it's 5.9 million. Only 1,374,000 jobs have been created since Dec 2012, while an additional 1,500,000 workers have left the workforce according to the EPI estimate."
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