Economic Report President

who have traditionally not fared as well in the labor market, includinghigh school dropouts, blacks, Hispanics, youth, immigrants, and singlemothers. The chapter then goes on to examine some important but lessobvious side benefits of the tight labor market. This is followed by a discussionof evidence on changes in the relationship between workers andemployers, including job displacement, job tenure, and the contingentwork force. Finally, the chapter reviews recent policy developments topromote job training and lifelong learning.ECONOMY-WIDE DEVELOPMENTS IN THELABOR MARKETEMPLOYMENTThe usual indicators of labor market progress—employment, unemployment,and wages—show that working men and women continue tobenefit from the ongoing economic expansion. Employment is at an alltimehigh, with 133 million Americans at work in December 1998, andonly 4.3 percent of the labor force unemployed. Having fallen from 7.3percent in January 1993, the unemployment rate is at its lowest levelsince February 1970 (Chart 3-1).Chart 3-1 Unemployment and Discouraged WorkersThe unemployment rate is at its lowest level since February 1970. Includingdiscouraged workers increases the rate by at most four-tenths of a percentage point.Percent1210Unemployment rate(left scale)Discouraged workers(right scale)Thousands6005008400630042Unemployment rateincluding discouraged workers(left scale)20010001969 1973 1977 1981 1985 1989 1993 1997Note: Discouraged workers and the unemployment rate including them are annual averages.Source: Department of Labor (Bureau of Labor Statistics).0Data on discouraged workers provide further evidence of a stronglabor market. The number of discouraged workers—workers who arenot employed and who have not looked for work in the past 4 weeks100