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049. The Loss From the Workforce During the Recent Recession

Government statistics have always concentrated on unemployment percentage. Consequently it hailed how after injection of trillions of dollars the unemployment numbers were finally lowered from above 10% to the present rate of slightly below 5%.

However, what matters is not only the level of unemployment but also what happens with the workforce participation rate. The following chart views workforce participation in terms of the percentage of prime age workers - from 25 to 54. This shows an amazing rise in the number of workers who exited the workforce:

As the prime age workforce increased from 95 million in 1955 to 155 million in  1984. The growth in employment was supported by a rise in the number of female workers,  The workforce added 50 million workers while the number employed managed such growth if only a 30 million workers that did not participate. 

That changed after 2000 when the number of workers  not in the workforce rose from 30 million to 50 million. Although this number is now improving slightly, the US the structure of the employment appears to be changed. 

CONCLUSION: The US economy must be able to prosper in the future with almost 30 million workers missing.


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