Why Today's Jobs Numbers Are a Drag

The unemployment rate has fallen, but keep the cork in the champagne bottles: it's falling because people are just giving up looking for work. The share of the population that is either working, or looking for work, has fallen to a 35-year low. The economy created just 169,000 jobs last month, barely more than we need to keep up with population growth. It's nowhere near enough to absorb the people who have been out of work for months or years -- what Karl Marx calledthe reserve army of the unemployed. No wonder fast-food workers are demonstrating for higher wages; jobs designed as supplementary income for kids, or housewives, are now being taken by breadwinners who can't find anything else.

To be sure, some of the decline is demographic. The population is aging, and that means people are leaving the labor force, simply because labor force participation peaks in your thirties and forties. So the weak economy can't be blamed for all of this; it's collided with a long-term trend that will continue even if the economy roars back.