Friday, March 8, 2013

No, the Labor Market is Not That Healthy

Everyone is dancing a jig over this month's jobs report, but we have yet to really recover from the Great Recession, nor are we particularly close.

This chart shows the employment-to-population ratio—the number of adults with jobs divided by the number of working-age adults—over the past 20 years. Keep in mind that even in 1993, prevailing social norms were more likely to keep women out of the workforce than they are today. Thus, despite a rise in the number of working women, we have a smaller share of adults working today. And keep in mind that in early '93, Bill Clinton took office and people thought the economy was in pretty bad shape. Compared to today, however, things look pretty good! If we had the same share of adults working today as we did 20 years ago, roughly three million more Americans would have jobs. If we have another twenty-one months of job growth on par with last month, we will finally get back to a somewhat healthy emp-pop ratio.
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