The May jobs report made headlines Friday with a positive bit of news: The unemployment rate has dropped to historic levels — 4.3 percent. It hasn’t been that low since 2001.
But there’s a statistic behind the unemployment rate that tells a different story about the economy. The main reason unemployment shrank is because the number of people working or actively looking for work shrank. And when the actual number of people looking for work drops, they are no longer considered unemployed and are no longer counted in the federal unemployment rate.
Many of these people are President Trump’s “forgotten” Americans: Working-class men who dropped out of the labor force, frustrated with the lack of well-paying jobs, turned out en masse to vote for Trump in November.
The labor force participation rate reveals more about how they’re doing. That number dropped from 62.9 percent to 62.7 percent between April and May. But that could be a temporary blip for several reasons. Maybe more baby boomers retired in May than in April, or maybe more teenagers quit their part-time jobs. The workers whose behavior says the most about the health of the US economy are those in their prime working years — those between the ages of 25 and 54. Their participation in the workforce also dropped in May, from 81.7 percent to 81.5.
While a one-month change is hardly alarming, the longer-term trend shows that Americans are still more disengaged from the labor force than they were before the recession. Ten years ago, 83 percent of prime-age Americans were working or looking for work.
This group of workers is particularly important to President Trump, whose plan to grow the economy involves getting more people back to work. But that means a lot more people need to be looking for work. So far, they aren’t.
Discouraged workers were slowly returning to the labor force
Jed Kolko, the chief economist for the online job site Indeed.com, says the economic recovery has been bringing many discouraged workers back into the labor force. But since the fall, the slowly rising number has plateaued. It’s possible that those who were still interested in finding work already did, he said, and that the rest have no intention of doing so.
“It may be harder to continue bringing people back into the labor force,” Kolko said.
Part of the reason workers aren’t returning is because many prime-age women have dropped out of the labor force to care for family, he says. In 2016, women were 10 times more likely to say they had stopped working to care for family members, according to an analysis by Indeed.com. Meanwhile, the most common reason men gave was that they were ill or disabled.
These are the main reasons people don’t join, or return to, o the labor force. In those cases, it doesn’t matter how many new jobs the economy creates.
Workers who return to school are also counted among those who drop out of the labor force. But considering that May is not a common time of year to start school, it’s unlikely that had any impact on the drop in labor participation.
The declining male workforce
The growing number of men who have been dropping out of the labor force in recent decades has fascinated labor economists. The fraction of adult men (under 65) who are not working has doubled since the postwar boom years.
This is particularly the case among white men without college degrees, whose job prospects have diminished the most during that time. In the 1940s and ’50s, this group found steady, well-paid factory jobs — the kind of work that has been steadily disappearing. Frustration about their lack of job opportunities is often cited as the reason working-class men in the Rust Belt turned out heavily for Trump, who vowed to revive US manufacturing as part of his campaign.
These are the “forgotten people” Trump has promised to bring back into the workforce. Yet four months into his presidency, nothing has shifted. As May’s jobs report shows, the number of new manufacturing jobs has hardly budged. The same goes for coal mining jobs. Most of the new positions created in May were in health care and professional services, which have been fueling job growth for years. Most of these jobs require college degrees or some sort of technical training.
Nicholas Eberstadt, an economist for the conservative American Enterprise Institute, says something dramatic would need to happen to get a large number of working-class men back into the labor force. The federal government would need to change the requirements for disability programs or help more people start new businesses.
“There would have to be a huge change in the US job-generating engine,” said Eberstadt. “And it would still take a long time to turn this historic trend around.”