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“This Chart Is A True Representation Of The Employment Crisis In This Country”
Wolf Richter www.testosteronepit.com www.amazon.com/author/wolfrichter
The civilian labor force in the US has been causing bouts of hand-wringing and head-scratching. It represents the official number of people working or looking for work. It’s what the official unemployment rate (U-3) is based on. If labor force participation drops – if for whatever reason, millions of people are no longer counted as part of the labor force, as is the case in the US – it’s a troublesome indicator for the economy and the real employment picture.
It also makes the unemployment rate, now 7.3%, look a lot less awful: if you’re not counted in the labor force, and you don’t have a job, you’re not counted as unemployed. There are millions of people in that category. And their numbers are growing, not diminishing.
“The irony of the U-3 unemployment statistic is the fact that while unemployment has gone down 30% since its 2009 peak, we have the lowest labor force participation rate in over 3 decades,” observed Ralph Dillon, Vice President at Global Financial Data, in an email. “The markets and politicians celebrate the official unemployment rate, but you have to be concerned with the trend that is most indicative of the health of the employment situation in this country: the downward trend of those who want to work and can’t.”
Before the financial crisis, the unemployment rate and the labor force participation rate weren’t correlated. Unemployment would jump up and down, based on the economy, but labor force participation moved to its own drummer:
“During the 1970s and 1980s, the labor force grew vigorously as women’s labor force participation rates surged and the baby-boom generation entered the labor market,” explained the Bureau of Labor Statistics. The labor force participation rate hit an all-time peak in early 2000 of 67.3%. “However, the dynamic demographic, economic, and social forces that once spurred the level, growth, and composition of the labor force have changed....” And labor force participation has since dropped to 63%.
The chart (Global Financial Data) juxtaposes the unemployment rate and the labor force participation rate since 1980. After the financial crisis, suddenly, for the first time in history, they both started moving in lockstep. Downward.
“This chart is a true representation of the crisis of employment in this country,” Dillon wrote. The diminishing labor force participation rate – the officially available labor pool, however unrealistic it might be – has been driving down the unemployment rate for the first time in history.
But beneath the overall numbers, it’s even worse. This chart by the BLS depicts labor force participation rates in 1992, 2002, and 2012, with an estimate for 2022:
People 55 to 64 years old, the first forget-about-retirement generation, are staying in the labor force to an ever greater degree. In 1992, only 56.2% were still in the labor force, in 2012, 64.5% were. Similar for older folks. The participation rate for people 65 to 74 years old jumped from 16.3% to 26.8%. Reality is this: fewer people can afford to retire.
But who is not making it into the labor force? Young folks. The participation rate for those 16 to 19 has plunged from 51.3% in 1992 to 34.3% in 2012. OK, the BLS explains that by an increase in school attendance, and that would be a good thing. But the 25 to 54 year olds? Even among them, participation rates dropped from 83.3% in 2002 to 81.4% a decade later.
Among the 18 to 34 year old “Millennials,” those lucky ones who’re official counted in the labor force, unemployment has been a nightmare, with double digit unemployment rates, still, nearly 6 years after the financial crisis, reported the youth advocacy group Young Invincibles. It’s even worse for the 16 to 24 year olds, whose official unemployment rate is still 15%!
In prior downturns, the employment rate for young adults nearly reached pre-recession levels within 5 years. In the Great Recession, young adult employment had not even recovered halfway by the same point. A quarter of all job losses for young adults came after the Great Recession was officially over. The lack of jobs had driven many discouraged young people from the labor force altogether. A recent report by Opportunity Nation estimates that 5.8 million young adults are neither working nor in school.
Sure, companies have been creating jobs since the Great Recession, but only at the growth rate of the working-age population, as evidenced by the BLS’s dreary employment-population ratio. It peaked in April 2000 at 64.7%, crashed during the Great Recession, and has been skittering along the bottom ever since. At 58.6%, it’s lower than it was during most of 2009! And the 30% improvement in the official unemployment rate – where the heck did that come from? The chart has the answer: people 54 and younger being statistically purged from the labor force.
Fed Chairman Bernanke wanted to reflect on the “accomplishments of the past eight years” and demolish “sceptics” that still doubted the Fed was the best thing since sliced bread. His policies “have helped promote the recovery,” he said. The recovery of what? Read.... Bernanke’s Delirious Praise For His Handiwork, The Concentration Of Power At the Top Banks
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What am I redefining?
People with money buy politicians, thats capitalism.
"People with money buy politicians, that's capitalism."
The operative word is politicians. If you mean small-minded impotent people with no power to affect anything, you are correct. If you mean people with the power to destroy capital at their whim and reward their owners, that's fascism.
2x Fail.
People with money DO NOT buy politicians.
CORPORATIONS with money buy politicians.
#2 that's not capitalism. Sale of PEOPLE isn't capitalism.
Sale of GOODS AND SERVICES is capitalism by INDIVIDUALS.
When it's entire corporations and it's government it's ALWAYS FASCISM. ALWAYS.
That's why you're wrong: the real definition already has been known for centuries and you are pretending your special version in opposite-world is for everyone but it isn't - it's Fail.
A corporation is a piece of paper. It sits in a filing cabinet somewhere. People make things happen.
Capitalism led to Fascism when the top Capitalists bought the government at the going market rate - a capitalist transaction. How did the capitalists get so powerful in the first place? Where was all that magic competition that stopped the excessive profits?
Capitalism is a nice idea for some, but in the real world, certain people help out their mates. Other people build relationships. Go to any business seminar. Business is about building and maintaining relationships. Just so happens, some people leverage their relationships with the forbidden fruit - the govt which is supposed to protect those who cannot protect themselves. The umpire might be kicking the goals but it is still a game of footy, albeit a corrupt game of footy. Shame the audience is asleep in the stadium.
The only -ism that really exists is feudalism. Everything else is smoke and mirrors to disguise this fact. When people get sick of fighting, they support the biggest bully that can give them peace. When the biggest bullies get sick of fighting, they might give you a bit of freedom to practise a little bit of democracy and capitalism, if you are lucky. Note that I am not a historian. This last paragraph is just my opinion. But the fact remains that the top capitalists bought the govt in a "free market" - not quite the same "free market" in which honest people do business, but the same kind of "free market" in which illegal drugs are bought and sold.
You've been brainwashed very badly.
A corporation is an EMERGENT collective activity of many people, a form of a culture combined with huge economic power.
It isn't a piece of paper.
CAPITALISM on the other hand NEVER EVER says you can't help out your mates.
In fact you can't help out your mates WITHOUT CAPITALISM because somehow you have to have something to help with: assets, skills, property, medicine, tools, whatever. You have none of those until you start with capitalism.
I'm looking at WORLD HISTORY not just today. You aren't and that's a problem.
"People with money buy politicians, thats capitalism."
Don't take this the wrong way, but you don't understand what capitalism is. FWIW: Probably not your fault as you probably were educated in a public school. Funny thing: "Public school education" is an oxymoron!
Capitalism is a process were people get to keep what they earn. The more they work, the more capital they acquire and get to use for their own needs. They can either invest it to build a bigger business or spend (vacations, luxury goods, etc). Modern civilization and technology was created by capitalism as people worked to create businesses and new technologies to improve thier standard of living.
Socialism and Communism create strong centralized gov'ts that try to regulate the economy through redistrubtion of labor. Usually with gov't cronies end up with the majority of the wealth. Socialism and Communism is a war on the middle class. The middle class is the only group that really creates economic growth. Socialism and communism are parasitic systems that feed on the host and need to ever expand their control as the consume wealth. A finite Socialist state aways runs out of other peoples money to steal. Thats why communists always seek to influtrate neighboring states and use proxy wars to expand thier control. A contained socialist or communist state that cannot expand dies. Some communist states use gulags (slave labor) to maintain their economy, as the rest of the population has no incentive to perform and choose to work the bare mininum. Without capitalism and personal inspiration to improve ones standard of living, there is no reason to work hard.
Facism is a form of socialisms that extends centralize control to the very large corporations. The large companies are given monopolies that work with the gov't to crush competition and personal liberties. Facism is usually a short lived gov't as its stiffles innovation and economic growth (monopoly) and either goes to war or falls in a civil war. Its just another form of socialism, as it need to expand to survive.
Rich people buying politicans is an oligarchy.
The US is becoming a fascist state as the gov't seeks to control the economy and its people and is partnering with large corporations to seek domination. Large companies are given advantages over their peers by the politicians , and the companies funnel money back into the pockets of politicans to keep the game going. By no means is facism capitalism, its socialism.
I hope this helps!
1 correction: a form of socialism in which every person can opt out if they want is not parasitic. It also permits a bulk scale of purchasing power or manufacturing power that otherwise is available only at the peak of capitalism which sometimes doesn't happen.
However the risk as you should be aware is that capital can't be used efficiently if it isn't allocated efficiently and it's capitalism that does that best, time after time.
Also by no means is Fascism any kind of Socialism. Socialism is NOT formed from corporations and Fascism MUST be.
They are unique & distinct.
" correction: a form of socialism in which every person can opt out if they want is not parasitic. "
Where is the a form of socialism that permits people to "opt out"? There isn't one! All socialism gov't force gov't regulations and wealth redistribution on their subject. I would love to "opt out" of social security and most gov't regulation!
"by no means is Fascism any kind of Socialism."
Sure it is! Its Corporate Wealthfare! As the state gives corporations monopolies and subsidizes them. Or it takes wealth away from corporations to redistribute it else where that the gov't uses for its benefit.
"Socialism is NOT formed from corporations and Fascism MUST be"
Fascism can also be the gov't nationalizing companies in order to redistribute wealth. In the case of Fascist Germany and Italy, the state nationalized companies for the benefit of the state. The NAZI party was the "national socialist workers party". Fascist is the merger of state and corporations. it can either be that the state nationalizes companies, or the corporations take over the state. In any case its form of socialism as one group (either the state or the corporations) assume control to take away the labor of others to subsidize others. Subsidies can be in form of monopolies, tax breaks, bailouts or regulation excemptions.
#1 workers co-ops exist all over the world. This is voluntary socialism and doesn't even require a government
#2 Nazis were eugenicists and never socialists or fascists. They are no more socialist than the Democratic Republic of Congo had democracy, much less the Democratic People's Republic of Korea aka NORTH KOREA.
Do you really get so easily fooled by propaganda?
One of my favourite coffee shops is a workers co-op. 100% socialist 100% opt-out / opt-in, 0% government.
And WHO exactly has that kind of money? John Q fucking Public? No.
The way I understand it is the people who are sitting on the kind of money that it takes to buy political favors are CEO's of LARGE corporations, most of whom spawned from Capitalism. Eventually they grow rich enough to buy political influence, wherein you have Fascism.
Am I wrong?
How did the corporations get so rich? Didn't a leaner, meaner, cheaper competitor keep their profits in check? Did they deliver an excellent product real cheap and all their competitors were just too lazy? 300 million US, 7 billion world population, and no-one could compete with them? But it's all right because eventually the corporates get lazy and then the cheaper competitor ... you mean the last 20 years of propaganda that I have read was ... wrong?
You are correct, it is Fascism. But from the point of view of the corporates, they bought the politicians in a free market. They have "perfect capitalism" - they can buy anything for an agreed on price. JQP can't? Well, he didn't work hard enough / smart enough / didn't innovate etc etc etc
And Doubleplusgood when their board members can park those fat asses in a seat on the beltway.
See: Monsanto, Halliburton, etc.
Just so. One of the greatest thefts in history.
If we only had a free press.
One will not retire, but expire.
Retirement date exceeded, expiration is the only exit strategy.
I watched a PBS documentary on the FDR work programs of the '30's, WPA, CCC, National parks, all kinds of things. This worked, it employed people, it was deficit spending used to help the economy along.
I had this thought, suppose, instead of giving $85B every month to the bankers, we had national work projects going on all over the country, rebuilding freeways, bridges, and other infrastructure, to the tune of $85B a month. Do you think things might be different?
Ahh, actually help real American families, instead of hosting bonus orgies on the banks? Do you think Congress is that stupid? They KNOW which side of their bread gets buttered.