So today, the Bureau of Labor Statistics (BLS) posted another round of it’s monthly employment statistics. Overall, the picture has been beating almost every expectation out there. Jobs are increasing and unemployment is going down, and in general, faster than most people seem to expect, and that’s great news, right? I always get a bit concerned when I hear the overzealous nature of the responses to these though… Not all jobs are created equal and certain jobs ignore swaths of the American populations in ways that may pose longer-term problems. Likewise, simply focusing on simply the unemployment rate leads to false assumptions. Thus, it is worth taking a look at the where jobs are increasing though, because it is not a universal gain.
I wrote a small program to go grab all of the labor force participation rate data for the various age groups the BLS keeps data for and dump it into an Excel file for graphing. The reason I’m graphing labor force participation rate as opposed to the unemployment rate is that the unemployment rate only identifies people that are looking for jobs. Often people assume that seems like a perfectly healthy relationship, but the fact is it ignores 2 key demographics of potential labor force:
- Those that have searched for a long time and can’t find anything so have given up looking for jobs for the time being
- Those that have been able (and willing) to live off friends and relatives and would prefer that rather than being in the labor force
By accounting for these groups in the participation rates, we can get a much better sense of where the economy is going and why. By doing it on an age-group level, we can see which age groups are actually participating in this employment gain. If you think it’s every age group, think again…
Let’s take a look at these age groups… First, the participation rate for those in the 16-17 and 18-19 year ages range has significantly fallen in the past 15 years. Is this bad? Not necessarily… As college enrollment goes up and degrees become a “requirement” for long term jobs, it would make sense that these kids would focus more of their time prepping for and getting through college. Likewise, with income disparity at an all-time high and generally shifted toward those of higher age, it makes sense that these groups would be supported more by their parents as they have the liberty to go to college.
So a closer look at the traditional “college-graduated” age (over 21) is worth looking at as well… The BLS posts this data, but people do tend do be somewhat ignoring it except in the occasional special reports the BLS produces.
So the youngest are definitely still having trouble finding jobs, but almost across the board, the participation rate is down. We were at 84% participation for 25-34 year olds and 35-44 year olds and about 75% for 20-24 year olds before the recession hit and we are now 4% off all of those numbers (81% and 71% respectively) for everybody except those over 34 years old and really we’ve shown very few signs of recovery for those age groups. The downtrend is definitely slowing, but a leveling off should not be taken as an upturn.
Now, as these 20 year olds get ready to graduate college, are there going to be jobs for them? Perhaps as importantly if not moreso: are they going to even try?