Submitted by Charles Hugh Smith from Of Two Minds
One True Measure of Stagnation: Not in the Labor Force
This is a stark depiction of underlying stagnation: paid work is not being created as population expands.
Heroic efforts are being made to cloak the stagnation of the U.S. economy. One of these is to shift the unemployed work force from the negative-sounding jobless category to the benign-sounding Not in the Labor Force (NILF) category.
But re-labeling stagnation does not magically transform a stagnant economy. To get a sense of long-term stagnation, let’s look at the data going back 38 years, to 1977.
NOT IN LABOR FORCE (NILF) 1976 to 2015
I’ve selected data from three representative eras:
- The 20-year period from 1977 to 1997, as this encompasses a variety of macro-economic conditions: five years of stagflation and two back-to-back recessions (1977 – 1982), strong growth from 1983 to 1990, a mild recession in 1991, and growth from 1993 to 1997.
- The period of broad-based expansion from 1982 to 2000
- The period 2000 to 2015, an era characterized by bubbles, post-bubble crises and low-growth “recovery”
In all cases, I list the Not in Labor Force (NILF) data and the population of the U.S.
1977-01-01: 61.491 million NILF population 220 million
1997-01-01 67.968 million NILF population 272 million
Population rose 52 million 23.6%
NILF rose 6.477 million 10.5%
1982-07-01 59.838 million NILF (start of boom) population 232 million
2000-07-01 68.880 million NILF (end of boom) population 282 million
Population rose 50 million 22.4%
NILF rose 9.042 million 15.1%
2000-07-01 68.880 million NILF population 282 million
2015-09-01 94.718 million NILF (“recovery”) population 322 million
Population rose 40 million 14.2%
NILF rose 25.838 million 37.5%
Notice how population growth was 23.6% 1977-1997 while growth of NILF was a mere 10.5% As the population grew, job growth kept NILF to a low rate of expansion. While the population soared by 52 million, only 6.5 million people were added to NILF.
In the golden era of 1982 – 2000, population rose 22.4% while NILF expanded by 15%. Job growth was still strong enough to limit NILF expansion. The population grew by 50 million while NILF expanded by 9 million.
But by the present era, Not in the Labor Force expanded by 37.5% while population grew by only 14.2%. This chart shows the difference between the two eras: those Not in the Labor Force soared by an unprecedented 26 million people–a staggering 15.6% of the nation’s work force of 166 million. (Roughly 140 million people have some sort of employment or self-employment, though millions of these earn less than $10,000 a year, so classifying them as “employed” is a bit of a stretch).
This is a stark depiction of underlying stagnation: paid work is not being created as population expands. Those lacking paid work are not just impoverished; they lose the skills and will to work, a loss to the nation in more than economic vitality.
There are over 322 million Americans so you need to add a third column of “other”. For 2015, it would be 322M – 40M = 282 million others. That column would extend 24 inches above your chart. That means 12% are in the labor force and 88% are not.
Are these households living on one income or is everyone on assistance — how can all these people go years without work?
Too many people having kids. Get population growth down to 2% and the NILF number will disappear.
Of course it’s up to the individual, and if you really want something to cuddle, you’ll most likely have them under your roof for at least 35 years.
Birth rate the lowest in US history.
I’m not in the labor force because I’m too busy starving The Beast.
But the point of this article isn’t to compare current birth rates to whatever they were in the past. It’s to look at how many of these additional people can find a job. Who cares what the rate was in 1920? Look how high that number of births has gotten! If everyone had eight kids in 1920, even if the birth rate went down and all their offspring only went on to have two kids apiece, so what? It’s still twice the number of people and too many bodies because we already passed the point of critical mass.
If you are content to keep chucking out additional kids and have them live with you all their lives, then that’s your business. But unless you are out there creating additional jobs FOR the addiional people you are creating, or leaving them enough money that they never need to work, you don’t get to complain.
I’m sorry there isn’t enough growth in the economy for everyone to have ten kids and for them all to grow up to have bright rosy futures. It was like that 100 years ago, but it had to end eventually. What we should have for a while is zero population growth or even a decline until everyone reaches the point of self-sufficiency.
In the meantime, I wonder the same thing Lulu wonders. How do all these people eat?
OT – On Oct 2nd TBP posted a story about the FBI wanting to recruit youngsters into their gang. Well, I can tell you that story is true to form. Why just yesterday, 10/5/15, James Comey, the head of the FBI was at my daughters high school here in the hedge fund ghetto and spoke to the student body at an assembly. I asked my kid what he spoke about, she said boring stuff but he did mention working for the FBI is an excellent career choice. I asked her if anyone asked Comey how the Bush boys dirty balls tasted? She said no.
The real answer is that we have too many useless people, and we have automated many menial jobs. I know people complain about shipping jobs to China – but who really want’s to assemble iCrap? Besides so much pc boards are already automated with chip placement, soldering, etc, soon a robot will assemble the remaining components.
I think half of the Americans must work for fast food, coffee shops, restaurants, big box stores, and retail – all shit jobs.
People live too long and they become useless.
My hometown (Allentown, PA) is a great example of the stagnation. It never recovered when the Bethlehem Steel went bankrupt (1981?) and Mack Trucks left, and AT&T left.
The Lehigh Valley is an empty shell of it’s former self. The hollow shell was filled with uneducated / low class Puerto Rican’s – the nail in the coffin. Small towns – like Reading, Easton, Slatington are severely depressed.
All sorts of ‘Revitalization Zones’ and schemes and tax schemes have failed to move the needle. What has come out of them is large scale corruption.
I think Pennsylvania may go the way of Illinois – corruption and bankruptcy.
robert says “There are over 322 million Americans so you need to add a third column of “other”. For 2015, it would be 322M – 40M = 282 million others. That column would extend 24 inches above your chart. That means 12% are in the labor force and 88% are not.”
Now, I like robert. But that is wrong. He must not be awake or something.
The US has 150 or 160 million people working. Participation rate inclusive of EVERYONE would be around 50% – including children, aged, etc.
It is the participation rate of those of working age that matters – and that has plummeted like a rock – even more so when part-timers are included, who are counted as “employed”. What a joke.
And those that are working are being targeted as the milch cows for the rest – tax ’em, baby!
The workers are being manipulated something fierce – Bernie Sanders and his ilk would have you believe that you can soak the rich (rich of course being defined as anyone making over whatever he thinks is too much per year), but he well knows there are not enough rich, and really what he wants to do is soak the aspirational and the middle-class. They are rapidly running out of other people’s money. What a surprise.
Wage Apocalypse for the American man: Typical male worker earned less in 2014 than in 1973.
llpoh, thanks; I knew something was screwy. So I am trying to make better sense of this. The Labor Force (or Workforce) is the employed plus the unemployed. From BLS data: 157 million LF/Workforce = 142 million (non-farm) workers + 1 million farm workers + 8 million unemployed = 151 million (or plus or minus 6 million). NILF are the: Young, Military, Institutionalized, Homemakers, Students, Elderly, and Marginal Workers. From a BLS chart NILF = 57 million. So here is a breakout: 322 million American population = 142 million non-farm workers + 1 million Farm Workers + 8 million unemployed + 57 million NILF + 110 Americans on Welfare = 318 million (plus or minus 4 million people). So workers / population is 143/322 = 44% and that leaves 56% not working. No wonder the roads are still full even at 2-3 PM around here. 322 population / 143 workers = 2.25 non-workers for every worker. The number on (Welfare + Unemployed) / Workers = (110 + 8) / 143 = 118 / 143 = 0.83 (83%) or in other words there is almost one (welfare + unemployed) person for every person working.
opps, 110 MILLION Americans on Welfare…
And we are witnessing this job stagnation here in the North Eastern Pennsylvania Marcellus Shale gas industry too. I have been out here in Dimock, PA (the ‘epicenter’ of this area) for 4 years now. Last year at this same time you could not find enough people to fill the jobs available. Now it is like a fucking California gold rush town gone bust ! The shear number of houses going up for sale or for rent, the ‘toys’ going up for sale that are popping up in front lawns everywhere out here, the cars, trucks, and even some farm properties. An amazing amount of shit has gone up for sale or for rent just since May of 2015. Where will we be this time next year ?
@PJ,
I also wonder how they are all eating. I’m going to the grocery store later and I know I won’t be leaving there for less than $200. I only cook for two, make most things from scratch and we eat out very little.
Many of the younger ones are mooching off a parent(s) and/or grandparents in some way. Even some with jobs are doing this. I see it with my own eyes. And people talk 😉
@Skinbag,
Admin’s prediction of the shale boom BUST!!! is just now beginning to play out.
If you have some time to waste, go to thelayoff.com for some interesting insight (and some bs too).
Just enter any company’s name in the search bar.
It’s going to be epic.
“The workers are being manipulated something fierce – Bernie Sanders and his ilk would have you believe that you can soak the rich (rich of course being defined as anyone making over whatever he thinks is too much per year), but he well knows there are not enough rich, and really what he wants to do is soak the aspirational and the middle-class. They are rapidly running out of other people’s money. What a surprise.”
In my area its about 100k. If you make over that the college students and lefties will chastise you fiercely for not kicking in your fair share.
“Its only money, you can’t take it with you.”
“You just got lucky.”
“Some people just need a little help.”
We’re screwed guys, Bernie is going to take the throne, increase government spending by 200% and taxation by 25%. We will crumble from within while the Bear and the Dragon divvy up the rest of the world’s natural resources and political clout between them.