There has been alot of talk about this weeks employment report- showing a decrease in unemployment. But that isn’t necessarily a good thing. There is a good article about this in CNNMoney this week.
The unemployment rate is not a simple calculation, like say “everyone working today/everyone who can work.” Its everyone that applies for work. It is everyone that ha s a job even if that job is part time because they cannot find a fulltime job. It is every college graduate flipping burgers to pay their bills because the jobs don’t exist. Since unemployment is based on how many file claims, and not all those that don’t – it can be misleading. In fact, 18% of all statistics are misleading. Ok, I made that up, but you get the point.
The “Labor Participation Rate (LPR)” is an interesting thing. It answers the question “Of everyone 16 or over that can work, how many either have a job, or are actively looking for a job?” People don’t work because they are retired (think Baby Boomers), or don’t want to work, or have given up looking for a job.
The LPR In January 1973 was a little above 60%, and it has risen gradually over the years – mostly as women entered the workforce, reaching a high of 67.3% in 2000. We have been in decline ever since. and today we are at 63.2% – the same as we were in August of 1978, more than 30 years ago. A little more than 9% of Americans who “do not work” are not counted as available – children under 16, those in the military (thats not work??) or prison. But there are 40 million people who just aren’t looking for work.
Now on the surface – well, that is their choice. However, it means 40 million fewer Americans contributing to social security, paying for medical insurance, and paying for Medicare. It means 40 million Americans that may not have the means to purchase the “mandatory” health insurance under ObamaCare, falling back onto public assistance for their health care. It means 40 million more Americans on Medicaid and other public assistance programs.
And it is going to make supporting the ongoing entitlement programs more and more difficult to fund, as more and more of us Baby Boomers retire…