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Unemployment numbers troubling as many drop out of labor force completely

Stephon Johnson | 1/16/2014, 12:32 p.m.
Last week’s jobs report unveiled that the United States only added 74,000 jobs in December, which is the weakest showing ...
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Last week’s jobs report unveiled that the United States only added 74,000 jobs in December, which is the weakest showing since the start of 2011 and a significant dip from the average of the previous three months (250,000).

But even small gains cloud some dark statistics. While the unemployment rate fell to 6.7 percent, the lowest since October 2008, 347,000 people dropped out of the labor force completely, which means they stopped looking for work, and only 143,000 additional people reported having a job.

Jason Furman, chairman of the Council of Economic Advisers for the Obama administration, admitted that while the overall numbers are good, more needs to be done.

“As our economy continues to make progress, there’s a lot more work to do,” said Furman in a statement. “Though December’s job growth was less than expected, we continue to focus on the longer-term trend in the economy: 2.2 million private sector jobs added and a 1.2 percentage point decline in the unemployment rate over the course of 2013.”

Furman also said that the numbers are a “reminder of the work that remains, especially on one of our nation’s most immediate and pressing challenges: long-term unemployment.” Furman pointed at Congress for not extending unemployment insurance, “cutting off a critical lifeline” for those who lost a job through no fault of their own.

And while the White House attempted to paint the unemployment numbers in a better light, other organizations wanted to keep the American people grounded in reality. Evan Feinberg, president of Generation Opportunity, a national, nonpartisan youth advocacy organization, sent an emailed statement to the AmNews lamenting the jobless rate among young people.

In the statement, Feinberg notes that the effective unemployment rate—which adjusts for labor force participation by including those who have given up looking for work—for 18- to 29-year-olds is 15.9 percent and the unemployment rate for 18- to 29-year-olds is 9.5 percent.

“The unacceptably high youth unemployment rate is troubling because we are the most creative, innovative generation in American history,” said Feinberg. “We are developing new technologies, saving lives and making this country better. The only thing holding us back is the constraint of government.”

According to Generation Opportunity, the declining labor force participation rate has created an additional 1.88 million young adults who are not counted as “unemployed” by the U.S. Department of Labor because they aren’t in the labor force, meaning they’ve given up looking for work due to a lack of available jobs. The effective unemployment rate for 18- to 29-year-old African-Americans and Hispanics is 24.2 percent and 16.8 percent respectively, while the unemployment rate is 16.7 percent and 10.5 percent respectively.

“The real shame is there are easy policy solutions that would free our generation to realize our potential,” said Feinberg. “We need to stop spending our economy into a tailspin and eliminate red tape and other barriers to work.”