Just came across a couple of articles on discouraged workers stats.
Bowyer and Luskin
From what I've read elsewhere (especially
jobwatch.org,
EPI), this recovery has been characterized as unique because of it's jobless aspect, a big part of which has been the high rate of discouraged workers.
The chart in the first link says the "discouraged worker" to "unempolyment rate" ratio is low compared to recent years, but I think that's a screwy way to measure it and I don't find that number as meaningful as the value in the second link (discouraged workers to labor force ratio). Luskin's chart says the discouraged workers rate is right now about 0.3% which is not that high within the range shown on that chart. But if I'm reading jobwatch right, they seem to be saying the discouraged worker rate is 1.8% now. Looking at this page from the BLS, it seems their comparable mearsurement is 7.1% for Feb instead of the 7.4% that Jobwatch has. Am I reading that right? And why not use the U-6 10.3% number?
I did see a chart here which does lead me to believe the current discouraged worker number is abnormally high, but I can't say for sure because it's not an absolute number, but the change since recovery.
I did try to figure some of this out myself. I believe you can get the source of Luskin's numbers from this nifty page at BLS. You can click away and get some very nice charts. If you compare the U-3 number (Total unemployed, as a percent of the civilian labor force (official unemployment rate)) to the U-4 number (Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers), you get a 0.3% difference for Feb 2004. However, would it be more meaningful to use the U-5 number (Total unemployed, plus discouraged workers, plus all other marginally attached workers, as a percent of the civilian labor force plus all marginally attached workers)? My guess is the historical trend would still look about the same either way though. Also, if you use the U-5 number for Feb, you get 1.1% difference which still doesn't account for Jobwatch's 1.8%. What else are they throwing in there?
From what I have read, it is beyond debate that the job creation numbers are at record lows (muted hooray) in relation to when a recovery began, but I am here asking specifically about where the current discouraged workers rates fit in historically, and what stats you should use to give the best representation of such.
I guess I am (secretly, shhhh) searching for bad news for the economy, but I want honest bad news, which can then ultimately be used for the forces of good. (Please don't tell me Luskin is right.)
Any econ geeks out there that can help me make sense of all this? Is the discouraged worker rate a valid criticism of the current economy, comparatively speaking?
Thanks from an econ idjit.