The United States now has 324 million people. Of that we have a large labor force. 70 million cannot work and most of those are children. But what about the rest? The media largely ignores a massive contingent of people. This group is made of those not in the labor force. Today we have a stunning 95 million Americans that are not in the labor force. So the unemployment rate looks healthier than it is because many of these people are yanked out when calculating the unemployment rate. It is still the case that we have 1 working person supporting 2 other Americans overall. This ratio seems to pan out when we break down the numbers. What are we to make of these 95 million Americans that are not in the labor force?
The big picture on employment
The media tries to make it seem that many that are not in the labor force are there by choice. Yet that isn’t the case. Many have given up on looking for work or many older Americans unable to find work have retired earlier than planned and are barely scraping by on Social Security. This somehow is pitched as a positive thing.
But let us break down the entire population with the latest numbers:
Source: Census, BLS, Jobenomics
-You first have 32 million people working for the government
-You then have 95 million people not in the labor force (can work, but not looking)
-70 million absolutely cannot work and these are mostly children
-15 million are unemployed
-112 million are part of the private employment sector
So those 112 million are largely supporting the rest of the country, including those working for the government since they are paid via tax revenues. This isn’t a bad thing but this is the overall calculus on how our population is segmented out when it comes to employment.
The real structural changes are seen when we look at the participation ratio for employment:
We are a long way from peak employment. The recession pain is still seen in these figures and that is why people are still incredibly angry even though the stock market is near a peak and the housing market is also near a peak in terms of prices. As we have highlighted before though, the homeownership rate is at a half century low (meaning fewer families as a percentage are owning their homes). This of course is largely due to the bailouts favoring big investors and Wall Street when it comes to purchasing homes.
What can we do about those not in the labor force? A large portion are retired but many are retired and are living day to day. The new retirement model is working until you die. 95 million Americans are not in the labor force and not a peep is uttered about this in the mainstream press.