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Declining labor force masks MO unemployment rate

July 19, 2012

MO’s labor force participation rate is at the lowest level since August 1985

For more than a year, Jay Nixon has claimed that Missouri’s economy is ‘gaining momentum’ and ‘beginning to turn the corner.’   But the facts dispute his claims.

On Tuesday, the Missouri Department of Economic Development released another dismal jobs report showing that 4,000 jobs were lost in June while another 12,000 Missourians dropped out of the labor force.

The declining labor force is the great untold story of the Missouri economy:  Over the past 6 months, more than 46,000 Missourians have left the labor force—and many are discouraged job seekers who have simply quit looking for work.  In fact, between December and May, Missouri’s labor force growth ranked 48^th in the nation.

Since Jay Nixon took office, the decline has been even worse.  Between January 2009 and June 2012, more than 87,000 Missourians have left the labor force despite the fact that the population has continued to increase.

Even more stunning, the labor force participation rate stood at just 64.6% in May—down from 67.3% when Nixon took office, and at its lowest level since August 1985.  This staggering decline masks the unemployment problem—because they are not considered jobless.

See below for a fact sheet detailing Missouri’s declining labor force.

“Jay Nixon continues to bury his head in the sand and claim that Missouri’s economy is ‘beginning to turn the corner,’ but the fact is, many Missourians are so discouraged that they have simply quit looking for work,” said Lloyd Smith, Executive Director of the Missouri Republican Party. “Since Nixon took office, the percentage of Missourians who are part of the labor force has plummeted to its lowest level since August 1985.  This stunning decline masks the unemployment problem and shows that Nixon’s optimism is really just a desperate attempt to cover up the problem and keep his job.”

FACT SHEET: Missouri’s Declining Labor Force

46,227 Missourians have left the labor force since December.

Month  Labor Force        Change
Jan         3,041,934             -10369
Feb        3,032,131             -9803
Mar        3,023,601             -8530
Apr         3,020,805             -2796
May       3,018,679             -2126
Jun         3,006,076             -12,603
Source: Missouri Department of Economic Development/US Bureau of Labor Statistics

Missouri ranked 48^th in the nation in labor force growth between December and May.  (Only two states—Florida & Tennessee—saw a worse decline.)

Since Jay Nixon took office, 87,598 Missourians have left the labor force.

The labor force participation rate was 64.6% in May—down from 67.3% when Nixon took office.

The labor force participation rate is at its lowest level since August 1985.