Posted on 05/13/2015 9:28:38 AM PDT by SeekAndFind
A reader recently asked us to check a claim that’s been widely repeated on conservative websites -- that 90 million Americans either aren’t working or aren’t looking for work. Over the past few months, the statistic has been cited by various conservative bloggers, pundits and news outlets.
We thought we’d take a closer look.
Here’s how the calculation is made, using Census Bureau population estimates and employment data from the Bureau of Labor Statistics:
The total U.S. population age 16 and over is at least 243 million. Subtracting the nearly 156 million Americans in the labor force in June 2013 -- that is, those who were either working or looking for work -- leaves 87 million Americans, which is close to 90 million.
However, the 90 million number is padded, since this number includes a lot of Americans who wouldn’t be expected to be working. Specifically:
• People age 16 to 17, who likely are in high school: 9 million
• People who are enrolled in either two- or four-year colleges: 21 million
• People age 65 and older, who have reached retirement age: 40 million people
That means 20 million people are of normal working age, not in college and not working. That’s less than one-quarter the amount repeatedly cited in the blogosphere.
So the 90 million number is exaggerated. Even so, the idea that fewer people are joining the workforce is something that worries economists.
All things being equal, economists like to see more people working because it helps economic growth (though not at the expense of dropping out of school, which can limit future employment opportunities and earnings potential).
To gauge these trends, economists can calculate the labor force participation rate, which is the percentage of the population that is either working or looking for work, and they can calculate the employment to population ratio, which is the percentage of the 16-and-over population that is currently employed. Both statistics generally track each other, but not in lockstep.
Here’s a summary of these statistics between the end of the last recession in June 2009 and the most recent month available, June 2013.
|
Statistic |
June 2009 |
June 2013 |
Change |
|---|---|---|---|
|
Employment level |
142.2 million |
144.1 million |
+1.9 million |
|
Civilian labor force |
154.2 million |
155.8 million |
+1.6 million |
|
Labor force participation rate |
65.7 percent |
63.5 percent |
-2.2 percentage points |
|
Employment to population ratio |
60.6 percent |
58.7 percent |
-1.9 percentage points |
So the number of people employed and the number joining the labor force have both increased since the end of the last recession -- but, importantly, these gains haven’t kept pace with the rise in population.
This decline actually started around 2000, but it intensified starting with the most recent recession.
"The trick is to determine how much of the drop represents the impact of a lagging economy, which is worrisome, and how much is due to non-worrisome factors, such as the aging of the adult population," Gary Burtless, an economist at the Brookings Institution, told PolitiFact earlier this year.
As more adults begin moving into retirement age, the percentage of Americans who work is bound to decline. And that’s been happening in a big way as the baby boomers age. Burtless has determined that the two employment ratios would have fallen in recent years just on the basis of aging, even if there had been no recession. But the age-related decline has been worsened by high unemployment rates during the recession.
Most troubling, economists say, is the decline among the core working ages of 25 to 55. In addition, the tight job market has convinced more people to opt out of the labor market, perhaps by becoming students or stay-at-home parents.
The key to describing the employment situation is to make sure you’re using the best possible statistics. "It’s important not to downplay the seriousness of the decline, while still getting the numbers right," said Tara Sinclair, a George Washington University economist.
Our ruling
Bloggers and pundits have said that 90 million Americans either aren’t working or aren’t looking for work. That’s a real number, but it includes high schoolers, college students and retirement-age Americans, leaving perhaps 20 million a better approximation. We rate the claim Mostly False.
However, the argument presented in this article does not change.
This is FYI.
Comments/rebuttals welcome
Sorry, forgot to add on the above chart, the subtitle to the chart is:
“After the recession ended, the number of employed Americans has risen...”
I’m not sure, but I don’t think that those over 65 are counted in the labor pool.
RE: I don’t think that those over 65 are counted in the labor pool.
What we should be looking at to get a more accurate picture, is the labor force participation rate of those who are ages 18 to 54.
Are they armed and do they want a change of regime?
Since as many as 25% of the 65 and over are still working (not retiring), I’d add 10 million back in.
Do they have a plan?
I think what people are also referring to are the people who have fallen off the radar screen and are not on the labor statistics.
Yeah, like all the part-timers who want full time work. The biggest employers in the country are all hiring a majority of part-timers. I think they just get gub’mint credits for hiring people they don’t need.
It would be nice to see a chart with a separate line for full-time and part-time jobs.
It all boils down to real income. Whether it is from multiple part time jobs or overtime from one job.
Real income has continued to go down since the recession. Around 8% decline. So with prices going up (gas at $4.00 again in CA) it’s no wonder families are back to hunker down mode. That means recession.
It’s not like they can lower interest rates to spur growth.
The biggest casualty is the opportunity cost of the unborn. Babies are not being had because parents are not optimistic.
The biggest flaw I see is not counting married women with children who chose not to work while their children are young. There must be at least ten or fifteen million such women.
Rebutting this claim ignores what really matters, which I’ll call the “Carry Ratio”. How many people are working to carry the entire population, including those who do not work, for whatever reason, in different time periods?
For starters, compare that ratio over time to see major trends.
The Aging of the population is a significant factor we can’t blame politicians for, directly (though it is why many of them support massive immigration to expand the base of the pyramid).
There will probably be a strong correlation to falling Carry Ratios and increased deficit spending by government.
More sophisticated research should get into how the trends bracket by demographic factors, the effects of earnings disparity (and how many earn enough to carry more than themselves), and whether those earnings are derived from wealth creation or government redistribution.
And what are the effects of investment, as opposed to wage income on the whole picture? The Leftist plan is to tap investment income to carry a large non-working population.
Throwing out the total number of people in each of the groups is disingenuous since a number of those groups are still working even though they are high school age, going to college and are of retirement age.
Figures lie; and liars figure. Any conclusion based on a false assumption cannot be true. Not even in a liberal’s mind (such as it is). A labor force participation rate of 63.5% means that the remaining population (36.5%) is not participating, i.e. unemployed.
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