Economic Report President

ecause they did not think they could find a job—has shrunk by onethirdsince 1994, the earliest year for which comparable data are available.Discouraged workers are not counted in the labor force and thereforeare not captured in the official unemployment rate. However,because there are so few discouraged workers, redefining the unemploymentrate to include them as unemployed increases the unemploymentrate by no more than 0.4 percentage point (see Chart 3-1).Much of the growth in employment reflects an increase in the shareof women looking for and finding jobs. More women than ever beforehave joined the labor force: among women aged 25-64, 72.4 percentwere working or seeking work in 1998, up from 70.2 percent in 1993and 33.1 percent in 1948. The labor force participation rate amongmen aged 25-64 gradually declined during the 1960s and early 1970s,but it has remained steady at about 88 percent ever since.A tight labor market in a high-employment economy means thatmore men and women who are looking for jobs are finding them, andfinding them faster. Those unemployed in 1998 had been searching forwork an average of 14.5 weeks, down from 18.8 weeks in 1994, the earliestyear with comparable data. The average length of a spell of unemploymentis sensitive to the number of those undergoing long spells. In1998, 14.1 percent of the unemployed had been searching for a job forover 27 weeks, far below the 1994 figure of 20.3 percent. By contrast,the share of those unemployed for less than 15 weeks rose from 64.2percent to 73.6 percent during the same period.WAGESOne of the best documented labor market trends of the past fewdecades has been the decline in real wages among men. According tothe Current Population Survey (CPS; see Box 3-1 for a description ofBox 3-1.—Sources of Wage DataThis chapter uses several different sources of data on wages.The Bureau of Labor Statistics (BLS) of the Department of Laborpublishes estimates derived from monthly surveys of both householdsand establishments: the CPS, which surveys about 50,000households, and payroll records reported by about 390,000 establishmentsrepresenting the nonfarm sector. Earnings data tabulatedby the BLS from the household data usually describe themedian weekly earnings of full-time workers aged 16 and over.However, because significant portions of the populations of interestin much of this chapter often do not work full time, in manycases the Council of Economic Advisers has made special tabulationsof wages including all workers aged 16 and over—part-time101