As reported at Long Beach Post here, “According to City officials, Long Beach has hit a new milestone: its unemployment rate has reached a six-year low, dropping to 8.4% as of April of this year.”

On the face of it, this sounds like very good news for Long Beach. A large part of the challenge with the consistently foundering national, state, and local economies has been that an increasing number of workers could not find jobs.

As employment lags, more people turn to social safety net programs -such as unemployment insurance, aid for dependent children, and welfare- to feed themselves and their families and to otherwise make ends meet. The fewer people who are employed, the fewer people we have paying into these systems. The fewer people paying in, the deeper our public debt becomes and the more our economy lags.

More people working is most definitely a good thing. But are there truly more people working in Long Beach?

The source for the information appears to be the State Employment Development Department (EDD). EDD published a news release on May 16th 2014. In this release EDD reported that “California’s unemployment rate decreased to 7.8 percent in April, and nonfarm payroll jobs increased by 56,100 during the month for a total gain of 1,303,600 jobs since the recovery began.”

Although this press release does not break down data by city (I could not locate a direct source for city-specific information) it does break unemployment down by county. Even that information is preliminary, however, because it has not yet been seasonally adjusted.

One of the important numbers to consider when discussing unemployment is called the “labor force participation rate.” The Bureau of Labor Statistics defines the labor force as: “…all persons classified as employed or unemployed in accordance with the definitions contained in this glossary” and the labor force participation rate as “The labor force as a percent of the civilian noninstitutional population (16 or older).” Put simply, the labor force participation rate denotes the number of people in a given population who are 16 or older and who are employed.

According to the U.S. Department of Labor-Bureau of Labor Statistics, the labor force participation rate in the U.S. continues to decline. According to a graph found here, nationwide this rate has been dropping -steadily and significantly- since January 2008. The latest U.S. labor force participation rate (April 2014) was 62.8%, down from 63.2% the previous month.

EDD also reports California’s labor force participation in its press release but expresses it in real numbers, rather than as a percentage. The latest California labor force participation (April 2014) was 18,652,000, also down 9,000 from the previous month.

In this context, then, between March and April, California allegedly gained 39,000 jobs but somehow lost 9,000 otherwise eligible workers who EDD, conveniently, no longer counts. While this still seems to indicate a very anaemic net jobs gain in California, it also denotes a far clearer picture than otherwise provided. And that picture is not nearly so bright and sunny as others might have us believe.

It is for this reason that it is prudent to consider published unemployment numbers in the context of the labor force participation rate. I would be interested to learn how the labor force participation rate changed over the same period in Long Beach and to what degree that may mitigate the glowing employment reports currently coming from various sources.

Regardless of what the published numbers tell us, or how some public policy leaders spin the information to their advantage, the hard truth is that California’s overall economic health has been declining for many decades and Long Beach has largely suffered as a result.

The taxation and regulatory climate in California routinely drives not only businesses but individual taxpayers out of the state. Industries and people are consistently leaving California for places where taxes are lower and regulations more reasonable.

The elected representatives in Sacramento can, and should, be doing far more to make California more attractive and competitive, but their answers continue to be higher taxes, not lower, and more regulations, not fewer. The state’s overall economic picture continues to worsen as a result and as the state goes, so goes Long Beach.

Sadly.