Why American workers are worse off today

Jul 06, 2012

Nin-Hai Tseng is a senior editor at Fortune. She joined the publication in 2010 as a writer-reporter covering economics and finance. Tseng holds an MPA from Columbia University's School of International and Public Affairs and a B.S. in Journalism from the University of Florida. She grew up in Miami and lives in Manhattan.

FORTUNE – Despite promising signs earlier this year, America’s jobless picture today is actually worse than many of us thought.

In January, the unemployment rate fell to its lowest level in three years, signaling that better days in the dizzying world of job hunting were on the horizon. But the biggest skeptics didn’t buy the good news. They blamed unusually warm weather for the better jobs statistics.

And it looks like the skeptics were right, at least according to the Labor Department’s monthly unemployment report released Friday. Unlike the reports of the past few months, June’s statistics is considered a much cleaner read of the state of the jobs market. At 8.2%, June’s unemployment rate is slightly lower than January’s 8.3%, but workers aren’t better off.

If anything, given expectations in January that the job market was well on its way to firmer footing, a few signs (some from The Wall Street Journal’s Ben Casselman) point that the unemployed face a more difficult road ahead.

For one, there aren't more people working today than earlier this year, when the unemployment rate saw some of its sharpest declines in recent years. Whereas the employment-to-population ratio stood at 58.5% in January, it stayed flat at 58.6% in June. Prior to the Great Recession, the ratio was at around 63%.

And workers aren’t feeling any more confident about their job-hunting prospects today. After hitting a three-decade low in April, the labor force participation rate has hovered around 63% since January.

Ultimately, the economy is far from creating enough jobs -- even when the weather is nice. In June, job growth slowed to 80,000 from January when the economy generated 243,000 jobs. The latter might be enough to keep up with population growth, but that’s far from making any meaningful dent for the nearly 13 million unemployed.

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