U.S. labor market is less healthy than it appears

At first glance, the U.S. jobless rate appears to be improving, as unemployment figures are trending downward and the economy continues to add jobs. But a deeper look unveils some troubling truths.

The U.S. economy has been in so-called "recovery" since taking a nose dive at the start of the worst recession in decades, which at its height saw 10 percent unemployment. Unlike previous recoveries that came roaring back, this one has been clawing its way out of the hole for years and is still nowhere close to pre- recession levels of unemployment.

While many from Wall Street to the White House have been quick to point out the lowering unemployment rate, which recently hit 5. 6 percent and was touted as good news, few people know it is not an accurate portrayal of the labor market's health.

In a recent article, Gallup CEO Jim Clifton put it this way: " For example, say you're an out-of-work engineer or healthcare worker or construction worker or retail manager, if you perform a minimum of one hour of work in a week and are paid at least 20 (U. S. dollars) -- maybe someone pays you to mow their lawn -- you're not officially counted as unemployed in the much-reported 5.6 percent. Few Americans know this."

"Yet another figure of importance that doesn't get much press: those working part time but wanting full-time work. If you have a degree in chemistry or math and are working 10 hours part time because it is all you can find -- in other words, you are severely underemployed -- the government doesn't count you in the 5.6 percent. Few Americans know this," Clifton said.

Moreover, the White House, much U.S. media and Wall Street have been quick to tout the 257,000 jobs gains last month. But another reality is that the recession wiped out mostly high paying and middle paying jobs, and many of the jobs created amid the recovery are low-wage, such as jobs in the fast food industry.

There is also an army of those who have stopped looking for work. Economists say that employers tend not to hire applicants who have been jobless for more than six months, as many companies believe, rightly or wrongly, that skills become rusty when not in use. That has frustrated many who have been jobless for more than six months, causing them to give up looking for work.

"The unemployment rate understates the weakness in today's labor market. We estimate that there are about 5.7 million " missing workers" who have left the labor force and thus aren't counted as unemployed, but who would be working or looking for if job opportunities were stronger," Dan Crawford, media relations director at the Economic Policy Institute, told Xinhua.

While the economy is gearing up in some areas and the stock market is surging, the benefits have not resulted in more and better jobs.

"The stock market is doing well because we have an economy built to assure high corporate profitability even when it's operating far below capacity and when most families and workers are faring poorly. Corporate income now increasingly goes to shareholders and CEOs, instead of workers," Crawford said.

If the economy stays at its current pace of jobs creation, it will get back to its pre-recession labor situation by May 2017, which means the last ten years will have been a lost decade for many Americans.

Younger workers have been hit particularly hard since the downturn. Assets of young households shrunk during the recession, and even more surprisingly, continued to shrink well into the recovery, according to a recently released report by Wells Fargo bank.

The median real value of assets fell from 38,200 U.S. dollars in 2010 to 29,600 U.S. dollars' worth of assets in 2013, the report found, noting that non-financial assets are a much larger component of young people's balance sheets than financial assets. Enditem