Article #7

This article is about the continuous decline in the labor-force participation rate and the unemployment rate. One interesting thing is always how the data is collected and how calculations are made. Although this article did not go into too much depth it did say that “data is derived from a one-time survey of households that is only updated when population estimates are revised”. A one-time survey seems bound to have some mistakes and be a little off. Especially if it is only revised once in awhile. Apparently the unemployment rate looks alright or “healthy” because so many people have dropped out of the labor force, therefore lowering the labor force participation rate. If the labor force participation rate would have stayed the same from 2006 onwards, last year’s participation rate would have gone up to 11.4%, significantly more than the reported 6.2%. The biggest concern at the moment is that the share of “prime-age” men in the labor force is going down. I guess it would be less worrisome is the women’s labor force participation rate would go up but it hasn’t. The biggest reason for the decline in the labor force was summarized in a neat sentence. “With broader eligibility for the government-provided food stamps, health care, and disability benefits, it has become advantageous for some people to stay home than to work”. This is probably not a good thing since what makes economy grow is productivity.