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Henry Olsen: Unemployment: What Would Reagan Do?

[Mr. Olsen is a vice president at the American Enterprise Institute.]

Friday's grim labor report is the latest confirmation that our economy is not recovering. A loss of 131,000 jobs and a stagnant 9.5% unemployment rate are bad enough. But a deeper look—at the little-known civilian employment-population ratio—shows how hard it's going to be to pull out of our crisis, and why the Obama administration's policies are unlikely to do the job....

...America is suffering its largest drop since World War II. When the economy was at its Bush-era height, in 2007, a little over 63% of adult Americans had jobs. Friday's report shows that only about 58.4% do, a decline of nearly five percentage points. While the unemployment rate remains steady at 9.5%, the employment-population ratio continues to fall each month. In April it was 58.8%, in May 58.7%, and in June 58.5%....

History also delivers sobering news on how long it might take to recover our economic health. There is only one instance since World War II of the U.S economy increasing the employment-population ratio by five percentage points in a decade: the recovery that followed Ronald Reagan's tax cuts in 1983....
Read entire article at WSJ