A Broader Look at The U.S. Employment Situation and the Importance of a Good Education

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Released: February 2011

Related Topics: Education, Employment & Wages

Authors:

Adam Looney • Policy Director, The Hamilton Project; Senior Fellow, The Brookings Institution
Michael Greenstone • Director, The Hamilton Project; 3M Professor of Environmental Economics, MIT; Senior Fellow, The Brookings Institution

Introduction

The January employment numbers, released today by the U.S. Department of Labor, present mixed evidence about the state of the labor market. While the unemployment rate dropped to 9 percent, payrolls were just better than flat, increasing by only 36,000 jobs last month.

Much attention is given to the official unemployment rate, which is certainly an important indicator of our employment situation. But, in fact, the unemployment rate tends to understate the severity of the challenge for American workers in the aftermath of the Great Recession. In this month’s posting, The Hamilton Project provides a more comprehensive look at the U.S. employment situation, focusing on a broader measure of the unemployed. In addition, we examine the impacts of education on unemployment and the widening gap between the least- and best-educated workers. Finally, we continue our focus on the “jobs gap,” or the number of jobs the economy needs in order to return to return to pre-recession employment levels while absorbing the 125,000 people who enter the labor force each month.