2014 January 06 Monday
The Job Market Non-Recovery Since Last Recession

The unemployment rate used to be a reliable measure of how well the economy is doing. But since the last recession ended in 2009 almost all the decline in unemployment rate is due to millions of people giving up looking for jobs. Furthermore, the US economy still employs fewer people than it did before the recession started. Since the economy has to expand due to rising population if the number employed stays the same the number not employed will grow ever year. That's what's happening.

The big drop in labor force participation rate is not just due to an aging population. It cuts across age groups. So what are people doing instead of working? Disability insurance is the biggest way the welfare state expands the number of beneficiaries below retirement age.

The proportion of those outside the labor force and attending school has risen by 0.9 percent (2.1 million), the proportion collecting disability insurance has risen by 0.7 percent (1.8 million), and the proportion of retirees increased by 0.8 percent (1.9 million). There were small changes in the proportion of those outside the labor force and spending time with family (–0.2 percent), while the proportion of those not working due to illness or outside the labor force for “other” reasons did not change.

From 2007 to 2012 of those aged 25 to 54 1.6% of them left the labor force. By contrast over the time time period 1.9% of those 55 and over joined the labor force. The old folks are discovering they are too old to retire. So they are headed back to work.

The decline in labor force participation rates makes a US government sovereign debt crisis more likely. Fewer getting paid means less taxes collected on wages and more qualifying for entitlements programs.

My standard advice: Develop more skills. Try harder. Gone is the era when the economy expanded quickly every year and a rising tide lifted all boats. You have to try to go up or you will go down.

Share |      By Randall Parker at 2014 January 06 07:27 PM 


Comments
Greene Paxton said at January 14, 2014 5:27 PM:

Working hard really isn't enough, that's the truth. Neither will be going to college or university. Except for science and engineering, master's degrees are worthless. Big unemployment coming up, massive immigration coming up, social unrest also coming up and watch out for Mexico..... It might just become one of the greatest threats to the U.S.

Greene Paxton said at January 14, 2014 5:28 PM:

Working hard really isn't enough, that's the truth. Neither will be going to college or university. Except for science and engineering, master's degrees are worthless. Big unemployment coming up, massive immigration coming up, social unrest also coming up and watch out for Mexico..... It might just become one of the greatest threats to the U.S.

leftistconservative said at January 15, 2014 3:38 AM:

having majority bloc control over the nation is what is best in life. Iceland, denmark, norway, sweden, austria, switz, austral, NZ...these are the best nations on earth. Do what they do. Imitate them. Make the USA small by sending power back to the states. Segregate the races. Diversity is strength...for Capital, but it weakness for Labor. We are Labor. Induce principles from the best nations on earth and then apply those principles here..

Science!

Check it out said at January 15, 2014 5:01 PM:

@leftistconservative:

Neither of these countries you mention have any sort of race segregation in order to be the best. The two trends that seem to be common among pretty much all of them is 1. not much religiosity. You will always find that the non-religious or highly atheistic societies are more peaceful. In Scandinavic and other Northern European countries most people don't base their policies, decisions, judgments or lifestyle on religious piety. They've always come high in agnostics and atheists. 2. These countries you mention have long Socialist traditions where egalitarism is highly valued, social-democratic traditions, to be better said.

When you talk about inducing certain principles from the best nations, I'm assuming you are willing to start with a highly educated agnostic, atheist, social-democratic population with a healthy sense of equality. These are societies in which most individuals understand the meaning of the saying, "My well-being depends to a great degree on the well-being of others". I can never be ok while most around me are not ok. This is no "golden rule" or whatever pious people believe to understand by it. This is Anthropoloy and History 101.


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