"If the same percentage of adults were in the workforce today as when Barack Obama took office, the unemployment rate would be 11.1 percent. If the percentage was where it was when George W. Bush took office, the unemployment rate would be 13.1 percent.
That helps explain a seeming contradiction in the unemployment numbers: The rate keeps dropping even though job creation has been soft. In April, the U.S. economy added a mere 115,000 jobs, according to the Bureau of Labor Statistics. In a normal month, that wouldn’t even be enough to keep up with new entrants into the labor market. But in this economy, it was enough to drive unemployment from 8.2 percent down to 8.1 percent, the lowest point since January 2009.
The explanation is a little-watched measure known as the “labor force participation rate.” That tracks the number of working-age Americans who are either holding a job or looking for one. Between March and April, it dropped by 342,000. But because the official unemployment rate only counts those workers who are actively seeking work, that actually made the unemployment rate go down.
Critics of the Obama administration have been quick to seize on this as the “real” reason for the falling unemployment rate. In February, the Republican National Committee released a research note on “The Missing Worker,” arguing that “over 3 million unemployed workers have called it quits due to Obamanomics.”
Economists say the story is considerably more complicated. For one thing, the trend predates Obama. And while part of the story is clearly that the labor force is shrinking because the bad economy is driving workers out, another significant part is that many Baby Boomers are beginning to retire early — a trend that has worrying implications for America’s future growth."
http://www.washingtonpost.com/blogs/ezra-klein/post/the-incredible-shrinking-labor-force/2012/05/04/gIQANXAy1T_blog.html
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