There are something interesting issues about labor market that I didn’t mentioned in my last post. Last time I talked about my guess about the reason why participation rate has been increasing in recent months. In fact, I believe those increases in participation were temporary, compares to the total downward trend of labor market participation.
From FRED, I found something more data related to this topic, below is the historical graph of different gender’s participation rates:
We can see clearly that male’s participation rate has been declining ever since 1950, from nearly 90% to today’s below 70%. While the participation rate of female is different, is had been increasing before 2000 and stayed at 60% level until the 2008 recession. Ever since then the female participation rate started declining at the same rate as that for male, that is to say, these two lines are parallel after 2008. This is to say that same amount of female and male quitted job market over those years, so the recession has the same effect on male and female who gave up searching for jobs.
However, one remarkable thing is that female are suffered less from unemployment problem then male in this recession. The following graph depicts the unemployment rate for male and female: We can see that the line stands for women is always below the line for male, and the gap between two lines was maximized during the recession, so from this point of view, actually female workers were not suffered from employment discrimination in this case. Compares to male workers, female workers were far more likely to find and keep their jobs.
Beside that, I also want to refer to the actual impact of this recession on unemployment, from my point of view, this recession is far more destructive then we thought before.
As showed in the above two graphs, we can see that both female and male unemployment rate hit their historical apexes. And from the graph below: the unemployment period is extremely long compares to previous recessions. Before this recession, the average unemployment duration was about 15 weeks, however, the duration period of unemployment of 2008 recession hit astonishing 40 weeks. This is to say that in former recessions, people on average speed about 3-4 months to regain their jobs while now, they must spend almost a year to find a new job. I think this must be one main reason why we witnessed lower participation rate according to WSJ, pathetically, people lost faith in finding jobs so more chose to quit rather than stay.
So what about those who stayed in job market? Many of them who found a job actually got only a part-time instead of a full-time. From the graph below: we can see the different between 2008 recession and former recessions: in the past, the part-time unemployment rate would surpass the full-time unemployment rate, but this time we see a surging full-time unemployment rate and a very low part-time unemployment rate-far lower than full-time unemployment. So, even some people found a job, it more likely to be a part-time rather than a full-time, which suggest that he/she will earn less and has more risk to loss the job again. Also, this suggests getting jobs are not so profitable, no wonder people are quitting job market.
From the data, the labor market is far away from healthy, actually it is way more deformative than we expected.