The New York Times reports on analysis from Moody’s economist Adam Ozimek showing that wage growth is more closely correlated to the workforce participation rate of prime working age adults (25 to 54 years old) than the unemployment rate. This indicates the true unemployment rate is higher than it appears to be. A drop to unusually low workforce participation in the wake of the recession and the slowest economic recovery since WWII seems to represent unemployed workers who have given up searching for work but who would accept work at wages near the current wage rate if given the opportunity to work.
