Unemployment rate vs. job growth. What matters more to the voter?

[old timey villain]

There are two main numbers that most people use to gauge the state of the economy.

So, here's the unemployment rate chart

Looks good for Obama

And here's a job growth chart

Looks kind of meh this month

Or, a lesser known statistic

Looks terrible for Obama

Which of these statistics is more meaningful to the average voters?

[old timey villain]

also, f*** me, I put this thread in the wrong area. Can a moderator move it to the 2012 election forum please?

[bgwah]

Unemployment.

[H.E. VOLODYMYR ZELENKSYY]

Unemployment.

[m4567]

If job growth continues to decline, the rate may not matter. If it picks up steam, Obama has a better chance.

[BaldEagle1991]

BOTH.

[Wisconsin+17]

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Workforce participation. Welcome back, Carter!

[morgieb]

Unemployment.

[King]

Unemployment for the unemployed; job growth for the employed.

[LastVoter]

Median wage

[Sbane]

Job growth I think, but unemployment is important too. Labor participation rate doesn't really matter since no one looks at it. It is something people can "feel" though. But having their parents and grandparents retiring doesn't feel like a bad economy, which is the main reason why labor participation is going down rather than completely dispirited workers who remove themselves from the workforce.

[Simfan34]

Unemployment. It's simpler to understand and is inherently contextual.

[Beet]

The unemployment rate makes for the easier headline.

Job growth is actually more important though, since unemployment rates can be affected by labor for participation.

Labor force participation looks worse than it is; when you take out gender effects, it has been steadily on the decline since the 1960s as a result of a few factors. (1) as people live longer, a greater share are in retirement, and (2) as first bachelor's, then master's and other graduate degrees become more important, people are staying longer in school, and (3) as teenagers get more "distractions" [internet, television, etc], they are participating less in the labor force (incidentally, the same factors are largely responsible for the decline in teenage sexual activity since 1991), and (4), starting in 2011, huge tidal waves of baby boomers started to hit retirement age.

Real disposable income, median wage is also underappreciated. Although it doesn't get reported much, it's arguably even more important because all working people are included in this statistic, whereas unemployment figures only affect a small minority of the labor force.

[Adam Griffin]

The unemployment rate makes for the easier headline.

Job growth is actually more important though, since unemployment rates can be affected by labor for participation.

[old timey villain]

here's what I don't get. In the past two months, we have had weak jobs reports, yet the unemployment rate has declined. People explain that by saying that more and more people are getting discouraged and leaving the workforce.

But it seems to me that maybe this is partly a natural effect of the baby boomers retiring. Also, why would people suddenly be getting discouraged and dropping out now, when we have had good economic news for most of this year?

[milhouse24]

here's what I don't get. In the past two months, we have had weak jobs reports, yet the unemployment rate has declined. People explain that by saying that more and more people are getting discouraged and leaving the workforce.

But it seems to me that maybe this is partly a natural effect of the baby boomers retiring. Also, why would people suddenly be getting discouraged and dropping out now, when we have had good economic news for most of this year?

I'm curious how certain under-worked groups are effected.  There are college graduates in their 20-30's that are working at Coffee shops or other part-time/random/off-the-grid jobs and high school dropouts who love to support liberals and democrats because they have a lot of free-time, since they are not working and begging for donations. 

Then there are also stay at home moms/dads who just decide to not work and raise children, because its too difficult finding a decent paying job to pay for child care.  These people might also find part time jobs.  I think stay at home suburban moms might be more inclined to vote for Republicans if their Husbands are wealthy.  These suburban soccer moms became anti-war and anti-Bush because they didn't want their kids dying in Iraq or Afghanistan. 

It will be interesting if voters want "Change" or "More of the Same"

[Wisconsin+17]

"(1) as people live longer, a greater share are in retirement"

Actually, we're seeing the opposite effect. Most of the change has been with young people under 30 who can't find work. Older people are actually staying level, which means they are staying on their jobs rather than retiring.

"(2) as first bachelor's, then master's and other graduate degrees become more important, people are staying longer in school"

People can't get jobs so they go back to school to try to get a job. This isn't a good thing. Staying longer in school, means that fewer people are working. If jobs were available then they would be working.

"as teenagers get more "distractions" [internet, television, etc], they are participating less in the labor force"

Which has nothing to do with 50+ unemployment. Nobody's hiring teenagers- for anything. Not when they can pick up someone who's got a bachelor's degree for the exact same work and wage.

Basically, Obama's managed to undo all the workforce gains of the last 30 years. We are just a few percentage points off the peak of 1955.

[Beet]

" '(1) as people live longer, a greater share are in retirement'

Actually, we're seeing the opposite effect. Most of the change has been with young people under 30 who can't find work. Older people are actually staying level, which means they are staying on their jobs rather than retiring."

Actually, that isn't true. Although more older people are indeed staying on their jobs than before, (a) that trend isn't caused by the current recession; it's been in progress since the mid-1980s. For example, from 2002 to 2007, although the economy as a whole grew, labor force participation among older workers also increased.. (b) However, despite this increase, workers still tend to fall out of the labor force as they reach 65 and retire. Particularly, workers aged 65 and over participated in the labor force at just a 17.4% rate, whereas total participation was 64.7%. That means that as more people (as a proportion of the population over 16) turn 65, we should expect the labor force participation rate overall to fall. The massive postwar baby boom began in 1946, which means that a very large cohort of workers began to retire in 2011. As such, we should expect to see an acceleration in the drop of labor force participation from 2011 as baby boomers retire.

" '(2) as first bachelor's, then master's and other graduate degrees become more important, people are staying longer in school'

People can't get jobs so they go back to school to try to get a job. This isn't a good thing. Staying longer in school, means that fewer people are working. If jobs were available then they would be working. "

While that may be true for some people, there has been a secular increase in the educational attainment of the US population, at the associate's, bachelor's and graduate level, fairly steadily, going back decades. In fact, the US recently passed a milestone with more than 30 percent of Americans holding a bachelor's degree. These trends will tend to depress the labor force participation rate over time. That isn't a bad thing at all. Unemployment rates among college graduates are around 5%, compared to over 15% for non-high school graduates. The more education you have, the more likely you are to find a job (until you get a Ph.D, but that's a different story ). These people putting off work for education will, for the most part, be rewarded.

" 'as teenagers get more "distractions" [internet, television, etc], they are participating less in the labor force'

Which has nothing to do with 50+ unemployment. Nobody's hiring teenagers- for anything. Not when they can pick up someone who's got a bachelor's degree for the exact same work and wage."

No, it has nothing to do with teenage unemployment rates, but it does have to do with teenage labor force participation. Teens today are having sex later, getting their driver's license later, and participating in the labor force at a lower rate-- all hallmarks of teenage-hood for earlier generations; and although the difficulty of finding a job is undoubtedly contributing to that, the primary driver that explains all three trends is changes in activities available to teenagers. With an increase in activities such as organized sports, increased pressure to get into a good college, and more options available online, on TV, and in video games, teens have less time to do those other activities. The decline in teenage labor force participation actually began in the 1980s and long predate the present recession.

I haven't even begun to look into the reasons why labor force participation among prime-age men (aged 25-54) has also been in decline since the 1950s-- although the decline did accelerate during recessions, it was consistent through the high job growth years of the 1960s, the 1980s and 1990s.

I'm not arguing that the difficulty of finding a job hasn't had a negative impact on labor force participation; it clearly has. I'm simply arguing that there are a lot of long term factors that reduce labor force participation among under 65 year olds, increase it among those over 65 year olds, and reduce the overall number as more people reach 65 and over. It's a complicated picture, but very little of it has to do with the present recession or Obama, necessarily.