The United States unemployment rate dropped to 4.7% last month, reaching its lowest point since 2007. Yet although this sounds like a huge step in the right direction, it is actually just the opposite. Unemployment is decreasing for all the wrong reasons.
The declining unemployment rate is incredibly misleading. According to CNN Money, disheartened Americans simply stopped looking for jobs, dropping out of the labor force altogether. This means that these individuals are no longer counted in the labor force, which consequently lowers the “jobless” rate.
In other words, though the unemployment rate is down, this statistic does not mean that more people are employed. Rather, it is simply casting a shadow over the fact that more people are not working or earning any kind of income.
U.S. employers have also drastically slowed their hiring over the past month, adding only 38,000 jobs in May. This is the lowest job growth in more than five years. Job gains have averaged just 116,000 in the past three months, down significantly from the average of 230,000 in the 12 months that ended in April.
Job loss in the United States has been widespread. Manufacturers cut 10,000 jobs and construction firms cut 15,000 positions. The retail and hospitality industries added jobs, but at a much slower pace than in recent months.
Furthermore, the number of Americans working part-time jobs while seeking full-time positions increased from 6 million to 6.4 billion. Prior to the recession, there were only about 4.2 million “involuntary” part-time workers.
Things are not looking good for the United States labor force. People in the U.S. are over-worked and underpaid if employed at all. In fact, workers in the U.S. currently work on average 164 hours longer per year than they did 20 years ago, but many are not compensated fairly for their hard work.