CNN Money has published a sensational piece titled “The 86 million invisible unemployed”. As is typical of media reporting on economic issues, the piece is deeply flawed and demonstrates a lack of understanding of the cited statistics.
CNN makes the claim that there are 86 million people not looking for work, and refers to these people as the “invisible unemployed”. CNN’s chosen statistic is the Bureau of Labor Statistics’ “Labor Force Participation Rate“. The participation rate is the percentage of people who are 16 or older and are either employed or looking for a job.
The participation rate currently sits at 63.8%, meaning that about 86 million people aren’t actively looking for work. However, it’s completely wrong to refer to these people as “the invisible unemployed”. People not participating in the labor force include: retirees, stay-at-home parents, full-time high school and college students.
In fact, the participation rate of 67.3% in 2000 was the highest since the BLS began recording the data in 1948. A participation rate of 100% would be undesirable; it would mean that our old were working themselves to death, and our young were doing menial work and not pursuing an education. A low labor participation rate can have a variety of causes and meanings: in a well-off society, laborers will retire young and families may sustain themselves with only a single income. I’m not suggesting that’s what happened here, rather pointing out the uselessness of this statistic. Even in hypothetical zero unemployment, the labor force participation rate would not be 100%.
The participation rate is only 3.5% off of its 2000 peak. That means the labor force has shrunk by 8.6m. That’s a non-trivial number, but it’s also an order of magnitude smaller than what CNN’s report claims.
Moral of the story: don’t believe everything you read, even from so-called reputable news organizations.