Libertarian blog Zero-hedge is making a big deal out of the fact that labor force participation rate is only 62.7 percent, having fallen rather continuously since the year 2000. Disaster!
Obama is crowing that unemployment is down to 5.9% Whoopee!
What am I to make of this? I tried a chart. Try to pigeonhole everybody in the population. Nice idea, but it is impossible. Trying, however, leads to some wisdom.
The Bureau of Labor Statistics reports the number of people employed. This is backed up by payroll company ADP and the IRS. The numbers can be fudged, but not too much.
Equally reliable are the number of people not in the labor force: kids under 16 and the number of people in prisons and institutions and the Armed Forces. I would quibble that our soldiers are employed and our jailbirds unemployed. Fine – but at least we can count them.
Below that (on the chart above) it gets murky. Kids between the age of 16 and college are generally in an undefined status.
The claim that 21 million people – that’s almost eight years’ worth of high school grads – are in college seems exaggerated. Without doubt, a good number of them are claiming student status, perhaps to knock down student loans, rather than simply admitting they don’t want to work. Conversely, lots of bona fide students work. The numbers are fuzzy.
Lots of people over 65 continue to work. At one point I was a retiree, a PhD student and an employee simultaneously. Assuming that people over 65 are retired makes the numbers work, but it doesn’t represent reality.
The 5.9% unemployed are people actually looking for work. They are a distinct minority of the people without jobs. The people not looking – stay-at-home moms, unpublished authors, disabled people, discouraged workers, etc. – make up twice as many by my arithmetic, 27.1 million. Some are making essential contributions to society, others are simply a drag. Who is who?
When one makes intelligent guesses about the number of retirement-aged people who continue to work, students who are also working, and so on, if leaves the number of bums – people who aren’t studying, retired or working, in the neighborhood of 60 to 70 million. That’s almost 2/3 as large as the number of people employed full time. The work ethic, one can safely say, is a relic of the Americana of former times.
The demographic outlook isn’t promising. Boomers are retiring – see the population pyramid below – with fewer people in the succeeding generations to pay taxes to support their PAYGO Social Security and Medicare.
There is a shift in attitude. The millennial generation isn’t as successful as their predecessors, which is why older folks are able to deny them jobs by avoiding retirement.
There is a shift in demographics. The founding stock Anglo Saxons, successor European immigrant stock, Asians and Jews who run the place are just not having enough kids. Those kids there are in the bottom tiers of the population pyramid are increasingly of traditionally less successful minorities. US K12 education is becoming majority minority this year. It takes a cockeyed optimist to assume that they are capable, and willing, to support us Anglo retirees in the style to which we have accustomed ourselves.
I would love to see somebody from either camp of liars, left or right, challenge my numbers. The major difference between mine and theirs is that I readily admit that mine have to be wrong. Question – what is right? Larger question – how will you pay my Social Security in twenty years? Largest question of all – how will the American republic, and my grandchildren, survive?