Gallup's Stunning Explanation For America's Unemployment Epidemic: Obesity

Two things became abundantly clear during today's Yellen press conference: i) the Fed no longer has any idea what it is doing, or where it is steering the economy, exemplified by the Chairwoman's response that she has little "confidence" in the Fed's current set of forecasts (because one can be wrong only for so long about the economy before one indeed loses all confidence in one's abilities), however since everyone is benefiting for now as the asset bubble is still growing and asset prices are still rising, there is nothing the Fed will change about its current line of action and ii) the Fed has no idea how or why unemployment - as massaged as it may be courtesy of tens of millions of Americans dropping out of the labor force - is as high and as structural as it is.

Of course, all of this should have been quite obvious to everyone else years ago when trillion after trillion in excess liquidity did nothing to stimulate the economy (as can be seen in the -2.0% GDP Q1 GDP is set to print in its final revision), and certainly nothing to boost employment, particularly long-term unemployment - those who are out of work for 12 months or more - to above-consensus levels.

So it appears there is something far more structural with America's long-term unemployment problem, something not even the "smartest academics in the (Marriner Eccles) room" can diagnose. Surprisingly, earlier today Gallup reported one factor that may be contributing to America's unemployment malaise - the same problem that is the reason for the insolvent US welfare state coffers: obesity.

According to Gallup, Americans who have been out of work for a year or more are much more likely to be obese than those unemployed for a shorter time. The obesity rate rises from 22.8% among those unemployed for two weeks or less to 32.7% among those unemployed for 52 weeks or more.

How does Gallup keep track of the Body Mass Index of America's millions of unemployed?

Gallup tracks U.S. obesity levels daily using Americans' self-reported height and weight to calculate body mass index (BMI) scores as part of the Gallup-Healthways Well-Being Index. Individuals with BMI scores of 30 or higher are considered obese. The Gallup-Healthways Well-Being Index also tracks the percentages of Americans who report that they have ever been diagnosed with various health conditions related to obesity, including high blood pressure, high cholesterol, and diabetes.


These results are based on nearly 5,000 interviews throughout 2013 with the long-term unemployed (defined by the Bureau of Labor Statistics as being unemployed for 27 weeks or more) and more than 13,000 interviews with the short-term unemployed (those out of work for less than 27 weeks).


Gallup and Healthways also track the percentages of Americans who say they currently have or are being treated for health conditions such as high blood pressure and high cholesterol. In both cases, the differences between the short-term unemployed and the long-term unemployed are striking: Those who have been jobless for 27 weeks or more are nearly twice as likely to say they currently have high blood pressure, and to say they have high cholesterol.

Gallup's shocking finding: Americans who have been unemployed for less than 27 weeks are somewhat less likely than those with jobs to have each of these conditions.

But is unemployment the cause of obesity, or vice versa, are the obese Americans simply more unwilling to look for work, or are just considered less "attractive", less hireable, and more of a "health insurance cost" threat to potential employers?

While these results offer evidence of a strong relationship between unemployment and obesity-related health concerns, the causal direction is not clear. Unemployment may cause some people to engage in behaviors that lead to health problems, while pre-existing health conditions may make it harder for others to find and keep work. For many individuals, both dynamics may be at work, perpetuating a negative cycle of declining job prospects and worsening health.

Gallup observes that jobless Americans may be more likely to fall into such a cycle if a higher incidence of health problems hinders their efforts to find a good job. Those out of work for 27 weeks or more report experiencing an average of 4.7 days out of the past 30 when poor health kept them from doing their usual activities. That compares with an average of 2.8 lower-productivity days for those unemployed for a shorter period, and just 1.4 days for full-time workers.

Over the longer term, one of the most worrisome implications of these relationships is that many of those who have been unemployed for a prolonged period may suffer chronic health problems even if they successfully re-enter the workforce. A 2009 study of Pennsylvania workers laid off in the 1970s and 1980s found that even 20 years later, these workers were 10% to 15% more likely to die in a given year than those who had not suffered a job loss.

Gallup's conclusion:

With record-setting rates of long-term unemployment in most U.S. states, the health consequences of extended periods of joblessness have become a rising concern for policymakers. The Gallup-Healthways Well-Being Index makes it possible to examine health and well-being conditions associated with long-term unemployment more closely than is possible using smaller-scale studies. Importantly, the tracking data can be aggregated to produce the large sample sizes necessary for studying well-being among specific employment groups.

One key concern raised by the current analysis is that employers in industries that require manual labor, such as manufacturing and construction, may be less likely to hire candidates who are clearly out of shape. If so, workers in these industries -- who already earn lower wages, on average, than those in knowledge-based sectors -- may be even more likely to be caught in a negative cycle of joblessness and poor health.

And there is another aspect, one where Obamacare also comes into play: private employers' high healthcare costs might lead them to avoid taking chances on those who pose greater health risks, particularly in a tenuous economic climate. As a result, candidates who are obese and who have been unemployed for 27 weeks or more may have two strikes against them even before they sit down for an interview.

So perhaps instead of dumping trillions into the stock market in hopes this record "wealth", already accruing to the wealthiest 1%, will trickle down to the average American, a far better use of the Fed's cash would be to launch weight-loss initiatives for America's record obese population: perhaps offering a monthly prize of $1,000 for every 10 pounds that Joe Sixpack manages to lose, and keep off every month. While it is arguable if this will help solve America's unemployment (and obesity) problems, it certainly will lower US healthcare costs in the long-run, and will also make for a far more fit population... At least until those who are not obese and also can't find a job accuse the Fed of discriminating against them.

Of course, considering the efficacy of the Fed's behavioral experiment this could simply backfire and force ever more Americans to become obese in hopes they too will be "subsidized" by free taxpayer money to lose said weight.

Perhaps, in retrospect, there is no fixing these two intertwined problems. Which leads to a sad conclusion: America's population may be increasingly unemployed, but at least it's fat...