Kim for Washington Monthly, “The Mirage of ‘Full Employment'”
Low unemployment rates mask soft spots in the job market, especially among rural Americans and minorities.
For the last several months, Republicans have been resting on the laurels of positive job growth and low unemployment—proof, they say, of the Trump economy’s strength. In March, the nation’s official jobless rate stood at 4.1 percent, the lowest it’s been since the peak of the Great Recession and a level that many economists say is at or approaching “full employment.”
Certainly on paper, the labor market looks to be nearly as tight as it was during past expansions, such as during the boom of the late 1990s and early 2000s. In reality, however, the low official unemployment rate masks some serious weaknesses in the economy, including in the parts of the country that are the strongholds of Trump’s support.
Rural job growth, for example, is lackluster in comparison to that of cities. And while college graduates and the highly-skilled are in demand, minorities and lesser-skilled workers are still struggling. The share of people actually participating in the labor market is also significantly lower than in the past, including among “prime-age” adults between the ages of 25 and 54 who are the backbone of the job market. Simply put, fewer Americans are working or even looking for jobs. This means the decline in jobless rates reflects to some extent a shrinking pool of Americans looking for work.
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