The
May jobs report turned out to be an enormous disappointment, when
the Bureau of Labor Statistics reported only 69,000 jobs gained on the
payroll survey and the unemployment rate ticked up to 8.2 percent. The
report also showed 49,000 downward revisions for the previous two
months.
The
truth is far worse. The rate of people participating in the labor force
(actually working) is “near historic” lows, according to Investor’s
Business Daily. Major news outlets from IBD, to CNN Money to The
Washington Post have noticed this worrying trend. But the three
broadcast networks have ignored this troubling news in 82 percent of
stories that mentioned jobs. The same networks that spun good employment news negatively [1] over and over again during President George W. Bush’s presidency.
Although
the networks have taken little notice, other national news outlets have
voiced concern. The Post explained how horrible the situation is in its
Wonkblog May 4 saying, “If
the same percentage of adults were in the workforce today as when
Barack Obama took office, the unemployment rate would be 11.1 percent.
If the percentage was where it was when George W. Bush took office, the
unemployment rate would be 13.1 percent.” [2]
The civilian labor force participation rate dropped to 63.6 percent in April -- the lowest since 1981. [3] In
the latest report it moved up a little, to 63.8 percent, but that still
means there are still millions of people not working. On May 4, CNN
Money wrote about the “86 million invisible unemployed,” invisible
because people who haven’t looked for work in the past four weeks are
not counted as unemployed. A “worrisome trend,” according to CNN Money,
which estimated that as many as 36 million of those are of working age [4]: over 25 and below 65.
“At
this point, the labor market is worse than people realize because
people are discouraged. Certainly, a large number of workers have given
up on the job market,” Keith Hall, a senior research fellow at the
Mercatus Center and former commissioner of the BLS told CNN.
In
82 percent (114 of 139) of stories about jobs on ABC, CBS and NBC news
shows failed to say anything about the declining size of the labor force
or even something generic about people giving up looking for work.
Networks Say Little About Workforce Dropouts, But Find ‘Positive Sign’ When People Return
People
dropping out of the workforce wasn’t a major concern for the networks,
but when people re-entered it in February that was deemed “a really
positive sign.”
CBS
“Evening News” anchor Scott Pelley spoke of “new evidence that hiring
is real and picking up speed,” on CBS “This Morning” March 10. Speaking
of the same February jobs report, “This Morning” co-anchor Rebecca
Jarvis affirmed Pelley’s statement saying “The trends are solid.”
ABC
also touted the February report. Speaking of the jobs “jolt,” ABC’s
correspondent and anchor Dan Harris said on “World News” March 9 that
“what is changing though, according to today’s report, people back on
their feet half-a-million Americans who had given up altogether looking
for a job, now back in the hunt. To you, it’s a really positive sign
that people are coming off the sidelines?” Economist Diane Swonk
answered that question “Absolutely!”
The
network was still holding on to that optimism during the April 5 “World
News” broadcast, when correspondent David Muir shared predictions of
what the March jobs report would show the next morning. He said
economists were estimating roughly 200,000 jobs and that they expected
the unemployment rate to stay about the same “as more people now enter
this force with hope.”
ABC
reported the disappointing jobs report on April 6 and 7, but made no
mention of the drop in participation. As it turned out, workers left the
labor force in March as CNN Money reported on April 6; the unemployment
rate fell because 164,000 workers left the job market. One NBC story
and one CBS story about that BLS report did mention briefly that “fewer people were looking
for work.”
Still,
CBS “This Morning” managed to find an expert who wasn’t concerned by
the March report. Anthony Mason pointed out on April 7 that “The economy
has added more than eight hundred and fifty thousand jobs over the past
four months, the best showing in two years. But after three straight
months of adding two hundred thousand plus, March growth slowed sharply
to just a hundred and twenty thousand.”
He
then turned to Michael Darda, an economist with MKM Partners and asked,
“This doesn’t ring alarm bells for you?” Darda replied, “It doesn’t
because the other barometers of the labor market still look relatively
healthy.”
Since
Jan. 1, the networks have found lots of reasons to talk about jobs and
employment. There were positive stories about people pursuing
non-traditional career options, starting their own businesses, and about
job fairs and job placement programs. There were also downbeat stories
about how difficult it has been for some people to find work (especially
veterans), but there was very little reporting about the “near historic
low” rates of participation and how much that might have to do with the
economic situation.
Demographics or Economic Distress?
While
it makes sense that the labor force would begin to decline as baby
boomers are nearing retirement, many economic experts and some media
outlets are concerned that a significant part of that decline “reflects”
the weak labor conditions.
The
Cleveland Fed wrote on May 8 that “Some of the decline in labor force
participation has been expected, as the baby-boomer generation moves
into the retirement. However, the recent magnitude of the decline is surprising and reflects in part the weak state of the current labor market. [5]
If
you look at people who should be working, people between 25 and 54, the
decline shouldn’t be as severe. But the Cleveland Fed looked at this
“less sensitive” age range and still found “steady declines in
participation rates not only during the recession, but also during the
recovery.”
Investor’s Business Daily also expressed concern about those “prime” workers on June 4. David Hogberg wrote that “From
mid-1987 until the Great Recession, the employment-to-population ratio
of 25-to- 54-year-olds usually ranged from 78.5% to 80%. It never fell
below 78.2% even during the 1990-91 and 2001 slumps.” [6]
Long
after the recession ended, “that ratio stands at just 75.7%,” Hogberg
said. Why? He thinks many have give up, some has stayed in school
because of “poor job prospects” and others have gone on disability.
Many
people have fallen out of the labor force in recent years and straight
onto the disability rolls. A contributor to Forbes.com pointed out that
they have grown by 1.5 million under Obama’s term for several reasons
including relaxed standards of reporting and greater incentive due to
the difficult economy. Concerned about the high growth, the author, Paul
Roderick Gregory, asked “Have Americans suddenly become less health or
more accident prone?” Rather than rising at the rate of population
growth (4 percent), the number of people collecting disability has grown 20 percent in four years. [7]
Many
economists have been trying to determine how much of the labor force
participation decline is demographic and how much is due to labor market
conditions. Some Federal Reserve economists have estimated it is
roughly half and half. Willem Van Zandweghe [8]
recently wrote in the Kansas City Fed Economic Review that roughly half
of the decline in participation between 2007 and 2011 was due to
cyclical (economic) factors. A paper from the Federal Reserve Bank of
Chicago has also argued that half the decline is demographic [9], according to The Wall Street Journal.
In
the news media, even the Washington Post admitted “part of the story is
clearly that the labor force is shrinking because the bad economy is
driving workers out …”
Regardless,
the lack of network coverage is typical of coverage of bad economic
news under Obama. Given the double standard for economic coverage (Bush
vs. Obama or Obama vs. Reagan) it is is difficult to imagine the
networks ignoring this story if a Republican was in the White House now
instead of Obama.
Methodology
The
Business and Media Institute examined all Nexis transcripts mentioning
“job” or “employment” from Jan. 1, 2012, to June 4, 2012. Casual
mentions of jobs as well as political stories that happened to mention
jobs or unemployment were not included in this analysis.
