Why Do So Many Working Age Americans Choose Not To Enter The Workforce?

Tyler Durden's picture

Via ConvergEx's Nick Colas,

Today we look at a unique dataset – Gallup’s annual poll of job satisfaction – to see what it can tell us about secular trends in employment, consumer confidence and spending.  This annual survey of +1,000 people active in the U.S. workforce goes back to the late 1980s, so it is a useful lens with which to consider issues like labor force participation rates that have shifted unexpectedly over the period.

 

Most surprising news first: Americans express a broad satisfaction with their jobs, regardless of economic conditions. The very worst reading since 1989 was in 2011 when “Only” 83% of respondents said they were either “Somewhat” or “completely” satisfied with their jobs.  The peak was in 2007 at 94%, and last year (August 2014) it was 89%.

 

The key takeaway is that declining labor force participation rates since the year 2000 (67% then, 62.6% now) aren’t because of any systemic disaffection with the American workplace. 

 

The other notable takeaway: workers are (strangely, we must say) satisfied with what they earn. Those expressing “Complete” satisfaction with their paystub hit a high last year (31%) not seen since 2010 and 2006…  Wage inflation?  What for?

You could call it the “Mystery of the Missing Worker” – why do so many people of working age chose not to enter the workforce?  Here are the numbers, as of the most recent Employment Situation report:

  • 250 million: the total number of people of working age in the United States. 
  • 149 million: the total number of people in that population that have a job.
  • 8 million: the number of people who want a job but do not have one.
  • 93 million: the number of people who don’t work, and don’t want work.

To put some context around that last number, it is 30% of the entire U.S. population.  This is the same as the current population of the entire West Coast (CA, OR, and WA) AND New York State AND Florida.  Plus another 10 million people.  Economists measure this with the Labor Force Participation rate, and it has been in decline since February 2000, when it peaked at 67.3%.  It is now 62.6% and last month was a new low back to the 1970s. People of working age increasingly do not consider themselves part of the labor force.  Most economists chalk this up to the demographics of an aging workforce even though virtually all the literature on the topic in the early 2000 predicted participation would continue to increase. 

We recently took a long look at a dataset that doesn’t often see the light of day but does provide some useful takes on how workers view their jobs.  It comes from the Gallup organization and is an annual survey of +1,000 employees since 1989 on their perceptions of job satisfaction in all its forms, from health and safety concerns to compensation to job security.  The complete data set can be found here, and the charts below highight the trends...

But here are the important takeaways.

#1: Americans are consistently satisfied with their jobs, although the readings vary slightly through a given economic cycle. The highest ever combined responses of “Completely Satisfied” and “Satisfied” was in 2007 at 94%. The worst since the start of the survey in the late 1980s was 2011, at 82%.  Last year – the results come out every August – the combined reading was 58% “Completely” and 31% “Somewhat” Satisfied, for a total of 89%.

 

#2: They also feel relatively secure in their positions.  Last year some 88% reported being “Completely” (58%) or “Somewhat” (31%) satisfied by the security offered by their jobs and, implicitly, their employers.  The worst readings were in 2009 at 80% total and in the early 1990s at 79%.

 

#3: Workers also report high levels of satisfaction with what they receive in terms of compensation.  Back in 1991 – the worst year in terms of general reported satisfaction for this question – “only” 66% of respondents were completely or somewhat satisfied with their pay stubs.  Even during the Financial Crisis and its aftermath that number troughed at 70% in 2011. Last year a total of 75% of respondents were satisfied with what they received for compensation.

 

#4: Workers who respond to the Gallup survey last year have the biggest gripes about health insurance benefits (only 61% satisfied), retirement planning (only 63% satisfied) and chances for promotion (68%).

 

#5: Conversely, workers reported exceptionally high levels of satisfaction in their relations with co-workers (95% completely or somewhat satisfied), physical safety (93%) and the flexibility of their hours (90%).

Frankly, when we started to look at these numbers we expected to see a mirror of the volatility common in consumer confidence surveys.  A few points here:

  • Consumer confidence as measured by the Conference Board peaked in 1966/67 and again in the late 1990s at readings of +140. 
  • Troughs occurred in the early 1970s, late 1970s/early 1980s and post September 11 at readings of 50 or so. 
  • The Financial Crisis took us down to below 30 in 2008 and readings struggled to get past 70 until 2013. 

We therefore thought that Americans would feel broadly the same about their work situations as they did the economy as a whole - that things are still pretty bad and the past was much better than the present.  This turned out not to be the case.  Yes, they express some marginal disaffection when times are hard, but the trough reading during and after the Financial Crisis was 83% satisfied with their jobs.  Hardly a pitchforks and barricades kind of number.  

In short, we can’t blame lower participation rates on the nature of work – broadly speaking – offered in the American economy.  In Internet parlance, the American workplace gets 4 ½ stars and a lot of recommendations.  Perhaps, in the words of Yogi Berra: “No one goes to that restaurant any more.  It’s too crowded”.

*  *  *

Of course, when work is punished in the Entitlement State Americans live in... what else should we expect but 30% of the employable to sit at home? As we previously explained,

This isthe painful reality in America: for increasingly more it is now more lucrative - in the form of actual disposable income - to sit, do nothing, and collect various welfare entitlements, than to work.

 

This is graphically, and very painfully confirmed, in the below chart from Gary Alexander, Secretary of Public Welfare, Commonwealth of Pennsylvania (a state best known for its broke capital Harrisburg). As quantitied, and explained by Alexander, "the single mom is better off earnings gross income of $29,000 with $57,327 in net income & benefits than to earn gross income of $69,000 with net income and benefits of $57,045."

 

 

We realize that this is a painful topic in a country in which the issue of welfare benefits, and cutting (or not) the spending side of the fiscal cliff, have become the two most sensitive social topics. Alas, none of that changes the matrix of incentives for most Americans who find themselves in a comparable situation: either being on the left side of minimum US wage, and relying on benefits, or move to the right side at far greater personal investment of work, and energy, and... have the same disposable income at the end of the day.

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wisefool's picture

capitol gains tax 10% income tax 25% plus. It is better to just buy and sell twitter stocks than work.

38BWD22's picture

 

 

I can only speak for myself on this matter: Gone Galt.

Slowly giving up stuff, slowly, slowly.  

Downsizing has its upside!  Less is more.  N. N. Taleb discusses this in his masterpiece Antifragile.

Publicus's picture

Because they have bought a house and are living off of the appreciation.

 

Now if they had bought gold instead, they'd be homeless and living off of hand outs.

Waylon Bits's picture
Waylon Bits (not verified) Publicus Jul 30, 2015 4:53 PM

With the advent of Bitcoin trading and computer information technology people do not need to "work" anymore.

OrangeJews's picture
OrangeJews (not verified) Waylon Bits Jul 30, 2015 5:02 PM

Jesus fuck, Fonestar!  Get a fucking life!

kaiserhoff's picture

Fat, lazy housewives who never intended to work..., ever.

 

Headbanger's picture

This poll is full of shit.

Most people I hear talk about their jobs FUCKING HATE THEM!

And every Boomer I know is bolting for retirement as fast as they can now.

The only guys I know who like their job are older plumbing & heating guys who own their business and charge a fortune

Oh yeah.. A 79 year old man who does custom sheet metal work makes a fortune making "sugaring pans"

And a 42 year old gun smith who makes custom flint lock rifles & pistols for big money.

 

new game's picture

i help maintain a 152 unit townhouse rental complex and i see what this article says, one fuck of a lot of lawn chair sitters. and this is a lower income(no sect 8) type place in the burbs. getting their money somewhere and certainly NOT from past planning and saving. so that leaves only one sugar daddy left, hmmm, pays to be a slacker these days. i certainly am NOT envious cause their lives are fucking boring and limited to porch money status, but they aint working some shitty job...

Amish FinEng's picture

Quite frankly, with the broad sweeping reforms to the definition of Disability, many American qualify without even getting out of bed.

Why bother? Only Amish have the pure work ethic.

new game's picture

Amish are very cool people, all over around Milaca, MN and friends indeed...

Split two cords last weekend and that was of interest. they know hard work, cause they, like the original mericans, worked sun up to sun set and feel/felt good to be tired and accomplish something made by hand, grown from dirt ect...

Ham-bone's picture

ZeroHedge simply doesn't get it...Here is a guy who gets what's going on in America

MIDDLE CLASS INCOMES AREN'T REALLY STAGNATING by MARTIN FELDSTEIN

http://www.marketwatch.com/story/are-middle-class-incomes-really-stagnating-2015-07-30

btw - Mr. Feldstein is a professor of economics at Harvard University and president emeritus of the National Bureau of Economic Research...so he must be right

Ham-bone's picture

Or perhaps they no longer work because of the safety and security of America's Social Security system???

http://econimica.blogspot.com/2015/07/all-things-social-security.html

macholatte's picture

 

 

Potential indicators that might shed some light onto the poll:
1.  How many of those polled are civil servants ... cops, firemen, teachers, park rangers, inspectors, bureaucrats, etc?
2.  How many have the most difficult job of all, stay at home full time mom or dad?

FYI: Most of the full time moms I have met are terriffic, focused and very busy raising their families and have very close relationships with their kids. The idea that there is something demeaning about a woman staying home and taking care of the family is something I find stupid, idiotic and repulsive. It is a form of freedom of choice that was common 50 years ago but rare these days since debt slavery has become so fashionable.

 

 

Richard Chesler's picture

What? get a job and lose my Obozophone?

Fuck that!

 

Waylon Bits's picture
Waylon Bits (not verified) Richard Chesler Jul 30, 2015 7:30 PM

Yeah it's so much better to work in a fish cannery, or grow vegetables or making dumb cars in Detroit.  Yeah that will make you real proud!  What a bunch of retards you people are.  There's a reason smart people have become virtualized.

gatorengineer's picture

The article misses the obvious...

The E-Con-omy is going underground.  There is a very large and popular restaurant near where I work that gives a 10 percent discount for cash.  A pizza place with a cash special as well.  Kids daycare, discount for Cash.....  etc, etc...

Also seeing this relative to uncovered (I have shitty insurance), medical visits, pay in cash, well there is a discount....

These places probably have alot of folks happy to work for a few bucks an hour cash, no taxes etc.

It comes in off the books, it goes out off the books.

The article also misses the disabled, and the disgusted.

Doña K's picture

The underground economies socialist countries is very large. Now American underground is growing as well.

Everything you make under the table is not visible and you can collect welfare and food stamps. The only thing is you can not own house, luxury car and such but human ingenuity is at work here. 

Two busineesmen hire its other's wife and they actually do not work. Every 6 months they get layed off and collect unemployment for a year or two. Then they get rehired and rince and repeat.

They both drive MB's. No need for Obama phones

MachoMan's picture

That's great until you get audited.  For restaurants, it's much more difficult for the tax authorities to nail you hiding cash on a small number of transactions.  However, for professional services, especially daycares and medical facilities, it is much more difficult to hide income.  There are a million ways to catch you...  whether it's measuring the electricity used by a coin operated laundry mat...  matching your invoices to deposits...  surveying all of your customers as to how much they paid you over the prior tax periods...  estimating your sales based upon other similarly situated businesses in the area...  Everything is great until you get audited and either have a good auditor or disclose too much information.  [pro tip: disclosing too little information and being a brick wall will incentivize the auditor to try harder to nail you; it's best to at least appear compliant].

I've seen more than a few recent incidents of audits that found all or a significant portion of the cash income of a business and then the business was impotent to turn around and deduct the employee/contractor expenses that were paid in cash.  In those instances, the tax bill is often six figures and the business ends.  Moreover, due to the large discrepancy in what was reported and what was found, you have fraud penalties to boot.  The businesses end up shutting down and the owners become saddled with debt that is sometimes not dischargeable...  rarely are they ever criminally prosecuted, but it's not unheard of.

In short, I strongly suggest against paying routine/regular employees with cash off the books...  in most instances, it's not worth it and you're only saving a small percentage of employer taxes anyway.  Unemployment insurance is ~$500 per employee per year, presuming they max out at a $12k salary cap at ~3.5-4%.  They can opt out of workman's comp in most cases...  and the employer only pays half of FICA (7.65%).  The risk isn't worth the reward.

Mr. Ed's picture

---only way the current tax authorities can go to work on you is if you need to succeed.  If you just barely get by... there isn't much they can do to ya.  It's possible to live on about $4500/yr and take the EITC... there are more people (potential high achievers) than you can imagine who do just this rather than deal with the loathesome IRS.

It's a real thing of beauty the crop of shitheads elected by your neighbors have created in the last 50-60 years.  /s

MsCreant's picture

I am so glad you don't eat fish or vegetables and you can get all you need from the virtualized world. 

Silly.

I don't do it for a living, but growing fruit and veg is very satisfying. I'd like to do talapia one day.

I am so retarded to want to grow it myself, know what is (not) in it and to watch it grow, from vine to flowers to tomatoes for instance. Yes, a real retard. I like my retardation very well. 

ejmoosa's picture

Seems to me if you have a brat or two living in your basement and they have part time jobs, then your household income would have risen...

Unless you got the pay cut, the spouse got canned, and there are no good prospects for the future.

 

 

new game's picture

nailed it, childern, wards of the parents and state with poor life skills, shacked up da basement smoking pot, hanging out and "looking for a job". the go getters are off doing real work in construction ect. and plenty of middle incomers for the lucky bs degreed lottery winners that actually found a job doing what they studied for.

Bobbyrib's picture

This article is complete MSM bullshit. Almost no one is happy with their jobs and no one is happy that the best job they can get is barrista at Starbucks while the MSM pretends there is a recovery. You shouldn't swallow this dogshit hook, line, and sinker.

willwork4food's picture

Totally agree. Is there a measure for the 0-17 year olds still in school? College?Wtf? Regardless, I wouldn't trust a 1000 point measure if that measure wasn't measured.

StackShinyStuff's picture

Either this is pretty good sarcasm or you are a hopeless Troll in need of a life.  I am going to give you the benefit of the doubt and upvote you.  But I'm keeping my eye on you...

PrayingMantis's picture

 

 

... "Why Do So Many Working Age Americans Choose Not To Enter The Workforce?"

 

... IMO ...

    ... quick answer: lack of proper training ...

    ... probable answer: didn't know anyone in that company to vouch for applicant ...

    ... dismissive answers: under-qualified; over-qualified; not a fit; wrong skin-colour; poor hygiene; poor interview presentation; filtered-out-due-to-some-unknown-reason; etc., ...

    ... lazy answers: make more on welfare than hourly rate offered; mom and dad always pay the bills ...

    ... cool answer: would rather hang out with sex, drugs and rock and roll ...

 

 

Amish FinEng's picture

If things go tits up for the English Zero Hedge readers. Rebirth yourself in a local Amish community. Arrive humble and with an open mind.

The Big Ching-aso's picture

Why Do So Many Working Age Americans Choose Not To Enter The Work Force?.........

Why Do So Many Service Age American Dogs Choose Not To Avoid Licking Their Balls?

Same reason. Because they can, man.

Pal's picture

Excuse me! I don't appreciate that characterization.  Try being white, male and sub 60 years old with no job, probably worse for minorities. You can get food stamps IF you get them to qualify you and the finger!  Try getting a section 8 housing subsidy, welfare, anything ... they will look at you and in their mind give you the finger mentally saying ..."get to work lazy!".  When your money runs out you either move into the woods in live in the camps full of unemployed males or you f_cking find a way to make scratch.

Vullsain's picture

Thats your fault you were born with a penis...No free lunch unless your parents will subsidize you..

Southern_Patriot's picture

Actually I think the penis is the issue, but not how you may think. The majority of men have been chained down by this servitude called child support. For a number of reasons. The job market, at least in my area, caps out at around $15 an hour. So let's do the math:

(If you can find a 40 hr a week job)

15 * 40 = $600 * 4 (weeks) = $2400.00

(After taxes)

$2400 @ .30% = $1680

(In Florida they garnish up to 50% AFTER TAXES)

$1680 / 2 (or half) = $840.00

Now imagine expenses for general living. But when you break it down from there you are making BELOW minimum wage.

 

Any Questions?

WhackoWarner's picture

Guess your stats would change if you had worn a condom?

Less gangsta garbage about "bitchez" and maybe a little bit of condom use.

FU

new game's picture

reality is after taxes 1700 to pay rent, food, maintain car if possible, and healthcare co pays and deductibles, assuming the job has full tyme benifits. not good w/o second income.

WhackoWarner's picture

So, pardonnez moi, but what is your point?  Are you saying that the penis gets to spurt and take no responsibility for that spurt?

 

Your premise is "Wow" look at child support payments?  Well what about the "spurtee?" and the resulting life?   Frig your stats.

 

Maybe $$$ would be saved by handing out condoms on every street.  (but we do not wish to impede male enjoyment now, do we?  NO we do not wish to impede male enjoyment by condoms/birth control. We just wish to impede the responsibility of the outocme of the act.  So inconvenient it is.  To have to work to pay for your actions.  Kinda impedes your ability to buy another drink and strut your stuff and do it again.)

sonoftx's picture

I have two orifices on my body that can be penetrated readily. I guard them very closely and there is NO way I can be impregnated. Women have three. In my experience a woman who guards her orifices well has no need to worry about any of the above. And smart women make damn sure ther is a condom involved if not married. And today c meth and HIV you have to be an idiot not to use a condom.
I know this is definitely politically incorrect but you womb, my child, your child, and what you or I do with them is none of their business. If you think it is then you are definitely on the wrong website.

VegasBob's picture

That fuck you got was nothing compared to the fucking you'll be getting for 18 or more years.

epoxe's picture

Hey dipshit... a) keep your dick in your pants. B)improve your marketable skills so you arent stuck in a less than $15/hr job. Stop fucking whinning, grow some balls.

Tall Tom's picture

Hey dipshit...

 

a) Have you ever told that to an irresponsible teenager whose surge of hormones and RERODUCTIVE INSTINCTS override any rational thought of long term consequences?

 

b) Do you have any teenagers. or children at that, BECAUSE YOU SEEM TO LACK BALLS?

 

c) Education and training in order to obtain a Technical Degree is fine and dandy...except for the fact that THERE ARE NO JOBS. Contrary to the popular opinion expressed on these pages ONE THIRD OF ALL BACHELOR'S DEGREES AWARDED SINCE 2000 have been awarded for STEM studies. (Science, Technlogy, Engineering, and Mathematics)

 

It is too bad that Foreign Exchange Students have earned a large percentage of the degrees in that 33%. BUT THERE ARE NO JOBS to support the remainder issued to US Nationals as the FUCKING JOBS HAVE BEEN OFFSHORED.

 

d) Men's dicks stiffen and womens twats wetten. It takes TWO to tango, there, idiot. And the women also have that BIOLOGICAL URGE TO REPRODUCE.

 

So go and give yourself a hand.

NoPension's picture

If sex between 3 people is a threesome,

And sex between 4 people is a foursome,

I know why I'm handsome.

Vullsain's picture

Agreed.... You articulated the issue much better. I was lazy and using sarc to make your point

Bangin7GramRocks's picture

The Amish are smelly hypocrites. They all have nice pickup trucks and they fucking live off WaWa convenience shit food. I always wanted to know how they decided what the optimum time in history was. They seem to have stopped the clock at 1880. Why? Why don't they live and dress like 1650, 1725 or 1980? Fuck them and their dumb hair!

new game's picture

also plenty scrapping by and missing payments w/ elec shut off and locked at meter. tons of beaters for cars, fatties galore, the new merica, a fucking disgrace imo, slobs that throw shit everywhere, dogs barking, and kids running around w/no parent. very mixed if ya know what i mean. scketchy, if ya know what i mean. shit ripped off weekly. cops raided a unit this morning.  yup it is happening; boots on the ground reporting first hand. i laugh, cause they got where they are by choices they made...don't help that merica was ripped and stripped clean by the club/mob.

fsa is a force to be reckoned with some day, lots of pent up anger brewing...

Earl Slaughter-- Truck Driver.'s picture

And a lot working off the books, grey or black-market. I've seen quite a bit of this, especially in areas where legitimate labor has little leverage: $10-15 per-hour under-the-table is a lot more than $11.00 an hour before taxes.

Bobbyrib's picture

I'm fine with people working off the books as long as they don't collect any government benefits. I wouldn't exactly vountarily hand over 20% of my paycheck to the US scumbag politicians to enrich themselves if I had the choice.

willwork4food's picture

Which is another reason there is a war-on-cash.

Handful of Dust's picture

My Paki friend tells me this is why Pakis, Indians, etc prefer those cash businesses like convenience stores and hotels. Also expalins why some of these lawn mowing business people and electricians, plumbers are sometimes very very wealthy. Lots of unreported cashola.

VegasBob's picture

Don't call it under-the-table. It's the Cash Economy which is why politicians are always dreaming of ways to outlaw cash.

laboratorymike's picture

Absolutely. I've been in the web development business for a couple years and the majority of potential subcontractors I've interviewed ask me for under-the-table pay. With the Indian students I tried hiring once, they took it a step further asking for extra hours under the table, which breaks immigration law (I'm glad I got rid of them immediately, anyone asking you to risk jail so they can get money is not someone you want to do business with). Ironically, I talked with an Indian friend about it afterwards, and he tells me he's been burned every time he tried hiring people from India and as such only hires Americans.

$10-15 an hour off the books really isn't a lot of money, so I could see a lot of people going this route and skipping the $25+/hour businesses.

I figure this is another reason they're going after cash; there has to be a good bit of untaxed money in the gray/black market.

Calmyourself's picture

Milaca sucks but St. Paul is much worse...