During Tuesday night’s GOP Debate on Fox Business, moderator Maria Bartiromo put forward a statistic that some in the media found surprising, saying that “almost 40% of Americans are without a job and are not looking.”
Media Matters called the statistic a “myth,” arguing that the official unemployment rate of 5% is the best gauge of the health of the labor market. But as I wrote in September, after Donald Trump made a similar claim, there is validity to the 40% statistic. In fact, if you look at the broadest measure of unemployment, the employment-population ratio, which measures the ratio of people with a job to the overall population of people over the age of 16, the unemployment rate is just over 40%.
The thing is, this statistic does not mean that the economy is in particularly bad shape right now. Here’s what I wrote back September:
The fact of the matter is, no single statistic can give us a full picture of the health of the economy. Just because the official unemployment rate is down to 5%, that doesn’t mean that the economy is as healthy as the last time it was at this level. That’s in part because there is a greater share of workers today who are working part time but want full time work than in the past. There are also a greater number of folks who have given up looking for work because they believe there isn’t anything out there for them. And lastly, as the nation ages the share of retired workers has increased.
In other words, be careful when politicians (or journalists) come bearing statistics that offer a simple story. There’s usually more going on than meets the eye.