“Right now, 92 million Americans are on the sideline outside of the workforce, and they’re not a part of our economy. It’s a silent nation of jobless Americans.”
— Donald Trump, speech to the Economic Club of New York, Sept. 15, 2016
Trump is grabbing onto a GOP talking point that first emerged in 2014 when the official unemployment rate starting falling below 7 percent. (It is now 4.9 percent.) Republicans started citing a decline in the labor participation rate, which has occurred largely because the baby boom generation has begun to retire.
But here, Trump expresses the rate as a raw number (“92 million Americans”) and then amps up the rhetoric by referring to a “nation of jobless Americans.” But this is rhetorical poppycock, as we will demonstrate.
Trump is actually using an out-of-date figure. The Bureau of Labor Statistics, relying on a monthly survey known as the Current Population Survey (CPS), shows that, as of August 2016, 94.4 million Americans 16 years and older were “not in labor force.”
How is this number developed? Well, there is a civilian noninstitutional population of 253.9 million people, and 159.5 million are in the labor force. The difference yields the 94.4 million figure.
But the unemployment rate is only 4.9 percent because just 7.8 million people actively are looking for a job and cannot find one. They are considered part of the overall labor force. In other words, you have to be seeking a job to be counted in the labor force.
Who are the 94 million not in the labor force? The BLS has data for the year 2015.
It turns out that 87.5 million — 93 percent — do not want a job at all.
The BLS, since it is mostly interested in whether people are working, generally does not ask why people are not seeking a job. “Our survey is designed to measure work and looking for work,” said Karen Kosanovich, a BLS economist. “We do not focus on people outside of the labor market.” But some information can be gleaned from the BLS data. The BLS examined some of the attributes of the 94 million in a report using 2014 data, but Kosanovich updated the information for The Fact Checker using 2015 data.
About 40 percent of the 94 million were 65 years and over (including about 19 percent age 75 or older), indicating they were retired. About 12 percent were between ages 16 and 19, indicating they were still in school. About 25 percent had a disability, though just over half of the people with a disability who were not in the labor force were 65 years and over.
Of the 41 million people ages 16 to 54 who were not in the labor force, roughly a third were enrolled in school in 2015. People ages 16 to 24 account for a large majority—about 85 percent—of these 15 million students not in the labor force.
Finally, of the people who were not in the labor force in 2015, about 14 percent (13 million) were parents of children under age 18. This includes about 4 million people not in the labor force with a child under 3.
There may be some overlap in these numbers — a person with children might also be enrolled in school — but generally the picture that emerges is that the 94 million figure consists mostly of people who are retired, students, parents or disabled.
Only 6 million people (6.3 percent) who in 2015 were deemed not in the labor force said they wanted a job, though 3.5 million had not searched for one in the previous year. About 1.3 million who said they want a job actually had family responsibilities, were on disability or were in school — factors that were holding them back from a job hunt at the time. Only 664,000 — less than 1 percent of the 94 million — said they were discouraged about their job prospects.
On a technical note, while Trump claims that the 94 million are “not part of our economy,” that reflects a fundamental misunderstanding of economics. People in retirement, on disability or in school are still part of the economy, as they buy goods and services with their Social Security checks, disability payments, tuition fees and so forth. Their money helps create jobs for people who actually want to be in the labor force.
The Trump campaign did not respond to a request for an explanation of his use of the figure.
The Pinocchio Test
As you can see, it is absurd to claim that 94 million Americans are on the sidelines of the economy and are part of a “jobless America.” You can’t be jobless if you don’t want a job.
Only a small percentage of these people want a job, as the rest are retired, in school, on disability or caring for children. No matter how much Trump wants to suggest the economy is on the rocks, the fact remains that the unemployment rate is below 5 percent — which is pretty good by any measure.
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