The unemployment rate is drifting lower and is cited by many as a sign that the economy is improving and will soon be robust. But that figure is a non sequitur at best, and a lie at worst. The current unemployment rate of 5.1% is hardly comparable to similar rates of 10 or 20 years ago because millions of people have stopped looking for work and are thus not counted as unemployed. The figure we ought to be looking at – and alarmed by — is actual labor force employment as a percentage of the working age (15-to-64-year-old) cadre. This group is composed of working-age people who normally would not have retired. (Of course, there are some people outside that group who are working, but for this analysis, the ratios discussed below should be comparable.)
It’s very hard to get perfect numbers for apples-to-apples comparisons, but after about two hours of reviewing eye-glazing charts from the Bureau of Labor Statistics and the U.S. Census, and using comparable statistics for December 2000 and March 2015, this is what we derived:
In late 2000, the 15-to-64 U.S. population was 180,201,025. The total number of employed persons was 133,465,403. That is a 74.1% ratio. By March 2015, over six years into the current Administration, and trillions of dollars of stimulus and deficits later, the 15-to-64 population was 204,026,415 and the number of employed persons was 139,843,024. The latter ratio is 68.5%. That is a decline of 5.6% applied to a working-age population of just over 204 million. If the same ratio of employment to working-age population existed in 2015 as at the end of the Clinton Administration, approximately 151,200,000 people would be working In other words, over 11 million fewer people are working in this country than one would expect if the current employment figures paralleled the last days of the Clinton Administration.
This is an “epic fail.” It is also the most signal, disheartening domestic tragedy of the last 6 years. Ultimately, the strength of our society is based upon tens of millions of Americans working, making decent wages, supporting themselves and their families, and paying taxes to support both domestic and military needs, including help for those who cannot help themselves. Do we want to pay for the Affordable Care Act? We need more jobs and more wage-earning taxpayers. Do we want a strong military? Ditto. How about air traffic controllers? Ditto. National parks? Ditto. And do we really want to do something about inequality, instead of just talking about it? Once again, ditto.
Today’s employment figures are pathetic compared to historical percentages, despite the increasing participation of women in the work force, and despite the fact that many of those women are working because men in households are not earning enough to support their families. The takeaway is that we have far fewer taxpayers (i.e. people pulling the wagon) and far more people needing/receiving benefits (i.e. sitting in the wagon) than we should. And with a larger percentage of over-65 citizens in an aging population, we desperately need the 15-to-64 age-group working percentage to return to historical levels, so we have more workers paying taxes and supporting governmental functions. Since we are looking at the 15-64 cadre, the retirement of baby boomers is simply not an excuse, or even a fig leaf, for this disheartening statistic.
The figures are stark and cannot be brushed aside. Panglossing the truth by citing the improving “unemployment rate” is ignorance or knavery. The unemployment rate is deceptively better because millions of people have stopped looking for work. The President and the apologists inside and outside the Administration won’t grapple with this, at least not publicly. Paul Krugman continually decries “austerity,” as if adding half a trillion dollars in deficit spending every year since the “stimulus package” is some kind of savage yanking away of the national punchbowl. Does any rational, knowledgeable American think the economy hasn’t taken off because we haven’t gone far enough down the Krugman highway?
Incentives to work — and fewer incentives not to work — are all that’s left to us. Incentives to create businesses and offer jobs and fewer disincentives to investment are what we need. Only then will we climb out of this ditch that we have dug for our proverbial ox—and our society.