Unemployment rates remained elevated in 2012, although rates have dropped since the Great Recession ended. In 2010, the national unemployment rate was 9.6 percent. Throughout 2011, the rate hovered around 9 percent, while the average annual rate was 8.1 percent for 2012. At the end of 2012, Nevada and Rhode Island had the highest unemployment rates, both hitting 10.2 percent. North Dakota reported the lowest rate at 3.2 percent.

States Shrank Workforces, but Future Employment Issues Loom

States took a wide variety of actions with their workforces to try to rein in costs after the Great Recession started gripping the country in late 2007.

As Leslie Scott, director of the National Association of State Personnel Executives said, “As we’ve heard often, never waste a crisis.”

States certainly didn’t waste this one.

Last Friday’s jobs report revealed that the labor force participation rate – the proportion of the working age, civilian non-institutional population that either has a job or is actively looking for one – hit 63.8 percent, the lowest rate since February 1979. That means 496,000 people left the workforce from February 2013 to March 2013.  People leave the labor force for a number of reasons, including moving into retirement or onto the disability rolls, leaving the job market to go to school or because they are discouraged and are no longer actively seeking employment.

States and local governments need to develop a pension funding policy and a new report offers guidelines for developing that policy to help states and local governments continue to reform and improve their public retirement systems. The report comes from the Big 7, a consortium of seven associations in Washington, D.C., serving state and local governments, which includes The Council of State Governments.

Stateline Midwest ~ March 2013

For most of the 20th century, thanks in large part to Social Security benefits, the advent of Medicare and widespread access to employee-sponsored pension plans, American workers were retiring earlier and earlier from their jobs.

But over the past two decades, the exact opposite has been occurring: In 1990, 12.1 percent of people 65 and older were in the labor force; U.S. Census Bureau data released earlier this year show that the rate reached 16.1 percent in 2011.

Stateline Midwest ~ March 2013

One sign that the economy continues on a path to recovery is the continuing decline in unemployment rates since 2010.

But in some parts of the rural Midwest, rates never hit high levels even during the depths of the recession. Instead, another question about the labor force is being asked: Why is it dwindling, and what can be done to bring workers back?

President Obama stressed economic equality and opportunity, focusing particularly on the financial woes of those earning the minimum wage, during his recent State of the Union address. He called on Congress to raise the federal minimum wage to $9 an hour by the end of 2015 and tie it to inflation, a move the White House estimates would bump up the wages of about 15 million low-income workers. The last time the federal minimum wage was raised was in 2009, when it went from $6.55 to $7.25 an hour. Since then, the upward creeping cost of living has eroded the value of that wage. If it had been adjusted for inflation, it would be around $7.61 today. If the rate moves to $9 an hour, it will be the highest—in inflation-adjusted terms—that it has been since 1979.

In President Obama’s recent State of the Union address, economic equality and opportunity were prevalent themes, particularly the financial woes of those earning the minimum wage. “Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong,” the president said. “Let’s declare that in the wealthiest nation on earth, no one who works full time should have to live in poverty.” He then called on Congress to raise the federal minimum wage to $9/hour by the end of 2015 and tie it to inflation, a move the White House estimates would bump up the wages of about 15 million low-income workers.