05/08/2012 08:31 am ET Updated Jul 08, 2012

Is America Struggling With A Shadow Unemployment Crisis?

The short answer is: half, U-5 probably tells you everything you need to know, and women are going to play the most interesting role as it evolves. Now for the question and longer answer....

The average labor force participation rate went from an average of 66% in 2007 to a 2011 average of 64.1%. Last month it was 63.6%. As a reminder, the labor force is the employed and the unemployed (those without a job who are actively looking for one) added together. When this number decreases it means that there are less people working, though it doesn't increase the unemployment rate (because, by definition, those leaving the labor force are no longer looking for a job). Let's try to get our arms around the latest econoblogosphere debate: how much is the decrease in labor force participation a type of shadow unemployment?

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