It's the taking part that counts

摘要

How strong is the American labour market? Around this time last year, few questions fascinated Washington more. Twelve months and one election later, much of the political heat has gone out of the issue. In June, unemployment fell to 5%, the lowest rate since September 2001. In what may be his last report to Congress as chairman of the Federal Reserve, Alan Greenspan warned legislators that the "slack" in the labour market was being taken in, and that unit labour costs had "turned up of late". A new paper by Katharine Bradbury of the Federal Reserve Bank of Boston should keep the question open for a while longer. The unemployment rate, she suggests, may be a poor mea-sure of slack in the labour market. By her yardstick, there may be as many as 5.1m Americans who do not appear in the unemployment rolls, but who might rejoin the job queue if work were more forthcoming. If so, the "true" unemployment rate could be over 8%, not 5%; the true number of jobless 12.6m, not 7.5m. Looking for work is a full-time job. Many job-hunters quit, despairing of ever landing their quarry. Some of these "discouraged workers", as economists call them, fall back on the earnings of a partner or spouse, some go back to school, others discover disabilities that qualify them for government benefits. Since they have dropped out of the labour force, they also drop out of the unemployment numbers.