By Meteor Blades / Daily Kos

The latest job growth report—released Friday by the Bureau of Labor Statistics—would in normal times be an unalloyed piece of good news. The official unemployment rate fell to 7 percent (a five-year low), 203,000 new jobs were created (putting the economy on track to show the best job growth since 2005), the labor-force expanded and the labor-force participation rate grew, wages edged up and the percentage of people forced to work part-time fell (only partly due to a return to work by employees furloughed by the government shutdown). Add November’s results to the total, and 7.4 million new jobs have been created since February 2010, definitely nothing to sneeze at.

But those improvements conceal a continuing problem that keeps being ignored or explained away as just a matter of demographics: The missing workers.

The folks at the Economic Policy Institute have done an excellent job of keeping track of “missing workers.” They explain the category thusly:

In today’s labor market, the unemployment rate drastically understates the weakness of job opportunities. This is due to the existence of a large pool of “missing workers”—potential workers who, because of weak job opportunities, are neither employed nor actively seeking a job. In other words, these are people who would be either working or looking for work if job opportunities were significantly stronger. Because jobless workers are only counted as unemployed if they are actively seeking work, these “missing workers” are not reflected in the unemployment rate.

That’s not just a handful of missing workers, but, by EPI’s calculations for October, 5.66 million of them. If those missing workers were looking for a job, the employment rate would be 10.3 percent instead of 7.0 percent.

It is argued in some quarters that most of these missing workers aren’t really missing. The numbers, it is said, are just a reflection of the growing cohort of retiring baby boomers and a long-term trend that started two decades ago of young adults not entering the work force in as great of percentages as used to be the case. Without doubt, both these factors play a part in the dwindling of the labor force. Nobody can dispute that there will be a tremendous long-term impact from retirements of baby boomers—the first wave of whom will turn 68 starting next month.

But that assessment ignores one big painful reality: The majority of the “missing workers” aren’t those aged 18 to 24 nor the superannuated. Most are, instead, people in what demographers call the “prime earning years”—age 25 to 54. And a big chunk of them are over 55 but haven’t reached 62 when they can first start collecting a Social Security check (though without full benefits). That is not an age group likely to quit working unless they have no choice. Check out the chart (which is interactive at the EPI site):

If the economy were to really take off, something that has been predicted to be just around the corner since late 2009, many of those missing workers in what were supposed to be their prime earning years would presumably return to the labor force and start looking for work. But despite improvements, that growth is still tepid and millions have given up trying to find a job that experience has told them isn’t there.

Tie these missing and officially uncounted Americans in with the 4.1 million who make up the long-term unemployed who have been out of work for 27 weeks or longer and the more complete story of the job recovery is clearly not a happy one. Add in income and wealth inequality, wage stagnation that now puts the inflation-adjusted median full-time wage of those who do have work at $1,000 less than it was in 2007, scandalous poverty and child-poverty rates and the continuing outflow of jobs due to unfettered globalization and it’s easy to see why the monthly jobs report—through no fault of the Bureau of Labor Statistics—distorts our actual circumstances.

As Bob Borosage at the Campaign for America’s Future noted last week:

We need investments in rebuilding our infrastructure, improving our schools from pre-K to affordable college, supporting the R&D vital to the industries of the future.  These investments would put people to work and boost growth. They could easily be paid for by ending the perverse tax policies that give companies incentives to move jobs and report profits abroad. Instead the federal government to cut jobs and slow growth. It is simply bizarre that Americans should continue to suffer mass unemployment, stagnant wages and growing inequality because ideologues obstruct common sense measures to get this economy moving.

Four years ago this month, the White House held a jobs summit where quite a number of ideas, including some Borosage mentioned, were proposed to get people back to work. A handful were implemented. But the key ones were left out, not least because of Republican obstructionism but also because there was not enough push from the White House. Today we—that is, millions of Americans—are still reaping the bitter harvest of that inaction.

It’s not that nothing was done. It’s not that many of our leaders’ hearts weren’t in the right place. But the reality is that without an industrial policy, without a revamped trade policy, without a tax overhaul and without other policies directed at reducing inequality,  a jobs policy will be nothing more than a Band-Aid. It might cover things over and hold us together for a little while. But what we desperately need is surgery. And some economic doctors for whom blood-letting isn’t part of the treatment.