Not So Great: 94,983,000 Americans Not in the Labor Force in May "A disappointing report from the Labor Department’s Bureau of Labor Statistics on Friday: The economy added 138,000 jobs in May, fewer than analysts were expecting; and after setting three straight monthly records, the number of unemployed Americans dropped by 233,000 to 152,923,000. The unemployment rate ticked down a tenth of a point to 4.3 percent, near historic lows. More below. But the number of Americans not in the labor force – meaning they are neither working nor looking for work – increased by 608,000 to 94,983,000 in May, close to the record high of 95,102,000 in December 2016. The not-in-the-labor-force number includes retirees, students, homemakers, the disabled, and others who have stopped looking for work for whatever reason. The nation’s labor force participation rate – the percentage of the 16-and-older civilian non-institutionalized population that is either employed or actively seeking work – dropped two-tenths of a point to 62.7 percent in May. The higher the percentage, the better, since people who participate in the labor force contribute the payroll and other taxes that help support many of those who do not work. The participation rate hit a record high of 67.3 percent in early 2000, plunging to a 38-year low of 62.4 percent in September 2015." This is the same bilge water we hear every time the Labor Force numbers are published, declines are BAD, increases are good. Why? Please explain. "The higher the percentage, the better, since people who participate in the labor force contribute the payroll and other taxes that help support many of those who do not work." Are these people starving to death? I didn't notice them on the drive to work, and it is quite clear that America today is a far better place for the poor, then was America in 1970, or 1940, or 1900. This is nothing but knee jerk belief that more people working is better, but is it? And is a Labor Force Participation rate of 62.4% all that shocking? Notice how the comparison number is only taken back 38 years, "The participation rate hit a record high of 67.3 percent in early 2000, plunging to a 38-year low of 62.4 percent in September 2015." This is because if the author goes back any longer, the LFPR drops like a rock. Back in the 1940s, 1950s, 1960s the LBPR average was much lower than today, at about 59%. Civilian Labor Force Participation Rate While similar, the top chart shows the Civilian Labor Force Participation Rate, the bottom the Ratio. In an otherwise uninteresting article, I found this . . .
I think the Ratio better shows how from before 1945 until just about 1980 the ratio of civilian employment to population remained pretty stead at about 56 -57%. Then during the late 70s a massive change occurs, and ratio rockets upward. The curve is very similar in both the Rate, and the Ratio. So, what's going on, why the change in the LFPR? Something interesting happened in the US Labor Force Participation Rate in 1970 From 1948 through about 1970 the LFPR remains between 58% and 60%, but by 1970 something happens, the LFPR begins rising, and continues to rise until it peaks a bit over 67% in 2000. That something was the massive movement of women, and coloreds into the workforce as the US society opened to women, and coloreds working. It appears from all accounts that this massive influx was driven by societal desires more than business need. This resulted in wage increases slowing. At the same time technological advancements, and productivity improvements began to make product price deflation more common. The result is that wages rose slowly after 1970, and product prices stagnated, and then declined. While we became wealthier, much of that wealth increase came through buying power of the dollar, and less through direct wage increases. The left loves to claim that wages have been stagnant, and if prices had continued as they have in the past this would indeed be a serious problem, but they did not. This is much confused by the fact that the Federal Reserve Bank continues to drive inflation. This means the dollar today is not comparable to the dollar of the past, and it becomes very difficult for the average person to see the real effect on buying power that this productivity/technology has had. We believe that everything costs more because it does in real dollar terms, but once normed for inflation, we find that things are much cheaper today. Something interesting happened in the US Labor Force Participation Rate in 1970 Our media betters always want more people working. I have no idea why they want this, but they do. It would seem that contrary to our betters' beliefs and desires, we want something else, fewer people in the workforce. It appears that we are trying to return to something closer to our 1950 LFPR than our 2000 LFPR. Perhaps we understand that it is better for one parent to work, and one parent to stay home, and care for the children, elderly adults, and support the community. Perhaps the media really are the clueless flapdoodles they keep telling us they are. Do not be surprised if the LFPR returns to 58%, or even goes below this percentage. We are a much wealthier nation then we were at any time in the past. Even the poor today live a more affluent lifestyle then most of the middle class did in the 1960s. I'm old enough to remember when you had to actually be poor to be considered impoverished It also appears we are beginning to understand that the feminism that drove the huge labor force increase during the 1975-2000 may have been a mistake. On the other hand, we've also found that many of the jobs we have are much more suited to women, then men. Expect the labor force to continue to change, both in the percentage of the population which works, and with respect to the gender of those working. The static idea that 70% LFPR is good, and 60% LFPR is bad is silly. We are likely moving into a new work/life arrangement which will suit our needs better. I am interested in a good argument to the contrary. Until then you might want to ignore the bleating of our media betters.
Comments
|
AuthorMaddog Categories
All
|