Ben Bernanke complains that there is still an “awful lot of slack” in the U.S. Labor market. He said last week that the official unemployment rate — up a tick at 7.3 percent in October — “probably understates” the problem.
Who could disagree?
As bad as it is from any historical perspective, we would be looking at the economy through rose-colored glasses if we took the 7.3 percent figure too seriously. If you include the millions of part-time workers who want full-time work, and millions more who have despaired of finding jobs and so have dropped out of the labor market, the real unemployment rate jumps to 13.8 percent, or close to twice the official rate.
Out of a workforce of 154 million people, that’s 21 million Americans who are under-employed, unemployed, or sitting on the sidelines — able-bodied but not even bothering to look for work. The U.S. labor force participation rate has declined continuously throughout the Obama presidency — from 65.8 percent of available workers in January 2009 to 62.8 percent today — the lowest it has been since March 1978.
So, yes, there’s an “awful lot of slack” in the U.S. Labor market.