The unemployment rate has been going down over the last few months – slowly, yes, but surely – and the economy has appeared more resilient then predicted in the wake of sequestration going into effect. This may mask underlying problems in our economy that has made it appear better than it is.
The Bureau of Labor Statistics keeps statistics on the labor force participation rate, the ratio of the total workforce to total employment-age Americans. Since the economic crisis, the participation rate has dropped from 66.4% to 63.4%.
As Emily Hulsey at the IJ Review writes:
The New York Times reported that the shift could, more specifically, be due to “the rise in the number of workers on disability.” Today, a record 8.7 million Americans receive disability benefits – that more than the population of New York City. However, the most disturbing aspect, as well as the most volatile variable, of this is the unprecedented number of young adults who are giving up on work and signing up for government assistance.