Tuesday, July 17, 2018
Business

PolitiFact: Statement that lowest percentage of Americans in 40 years have a job is mostly true

The statement

"We have the lowest percentage of Americans actually holding a job in 40 years."

Sen. Jeff Sessions, R-Ala., Monday in a speech at the Republican National Convention

The ruling

Taken literally, the correct economic statistic to use for answering this question is the employment-to-population ratio, or EPOP for short, which the Bureau of Labor Statistics tracks. This divides the number of employed Americans by the total civilian noninstitutional population at least 16 years of age.

By this measurement, Sessions isn't correct.

From 1948 to the early 1980s the employed percentage of the population generally rose, from 55 to 60 percent, and then fell with the onset of the early 1980s recession. After the recovery gained steam in the mid 1980s, the statistic rose again, eventually reaching 65 percent before falling after the Great Recession.

This pattern shows a few other things worth noting.

First, it indicates that since the end of the Great Recession, the employment-to-population ratio has been climbing, slowly but fairly steadily. After bottoming out at 58.2 percent in 2010 and 2011, the trend line has zigzagged upward. It currently stands at 59.6 percent, or 1.4 percentage points above its low point about five years ago.

Second, Sessions has exaggerated the length of time since the previous low point.

It was last as low as 58.2 percent in August 1983, which was 33 years ago. And the last time it was as low as its current level — 59.6 percent — was in August 1984, or 32 years ago. Both are shorter periods than the 40 years Sessions cited.

We suspect that Sessions was instead referring to a different statistic, the labor force participation rate, since that is a common talking point for Republicans. This takes the number of people either working or trying to work and divides it by the total civilian noninstitutional population age 16 and up.

Currently, this number is 62.7 percent. It was last that low in February 1978, which is a bit over 38 years — close to the 40 years Sessions referred to.

Economists say this measurement captures important aspects of the job market. When the civilian labor force participation rate is low, it's a concern, because it means there are fewer working Americans to support non-working Americans.

But it's worth adding some context as well. As we've mentioned before, a notable factor in the decline of the labor-force participation rate is the aging of the baby boom generation. As more adults begin moving into retirement age, the percentage of Americans who work is bound to decline.

When we last looked at this question in 2013, Gary Burtless, a Brookings Institution economist, told us he had estimated that the labor-force participation rate would have fallen in recent years on the basis of aging alone.

Still, the recession undoubtedly exacerbated that decline. In a weak job market, some people who might otherwise want a job may return to school, become full-time parents or retire early.

We rate this statement Mostly True.

Edited for print. Read the full version at PolitiFact.com.

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