“Because Jobs in the U.S are doing so well,” President Donald Trump tweeted this morning, “Americans receiving unemployment aid is the lowest since 1973. Great!” The President’s declaration came on the heels of the Labor Department’s April Jobs Report, released today, which shows that the unemployment rate is down to 3.9 percent, the lowest it’s been since 2000. A decreasing unemployment rate would seem to be good news! Now, time for some bad news: Part of the reason the unemployment rate fell is because 236,000 people left the labor force altogether last month, not because everyone suddenly has jobs, according to the same report.
Because Jobs in the U.S. are doing so well, Americans receiving unemployment aid is the lowest since 1973. Great!— Donald J. Trump (@realDonaldTrump) May 4, 2018
“The unemployment rate is a measure of people who are looking for a job and those who are working,” Elise Gould, a senior economist at the Economic Policy Institute told The Outline. Gould noted that while unemployment is technically falling, the figure doesn’t include unemployed people who haven’t looked for a job within the last month. “The unemployment rate fell because you had people leaving the labor force,” she added.
Gould said that the unemployment rate can fall for the right reasons — more people are working — or because of other structural factors, like a drop in labor force participation. “Unfortunately, this time it looks like it happened for the wrong reasons,” Gould said. While she acknowledged that this rate can be partially attributed to Baby Boomers retiring, many younger workers are simply getting discouraged and giving up on looking for work. Among “prime-age” workers between the ages of 25 and 54, she said, there were more people leaving the labor force than finding jobs.
Of course, solely measuring the unemployment rate is a slightly misleading way of gauging who is employed. A recent Department of Labor report found that jobs are disappearing faster than they’re being created. Meanwhile, the rate of workers going freelance is climbing —and the rate of “involuntary part-time workers,” or people who are forced to work part-time jobs despite wanting full-time work, doesn’t seem to be decreasing, according to economists at the San Francisco Federal Reserve.
In other words, even if unemployment is down, a whole lot of people aren’t succeeding in finding full-time positions that provide good wages and benefits. Maybe in the future, we’ll achieve full employment by making everyone have three part-time jobs and a side hustle.