4 ms·

The official unemployment rate seems too complicated to me. I prefer participation rate, which is very straight forward to measure. The bad news is that parti

The official unemployment rate seems too complicated to me. I prefer participation rate, which is very straight forward to measure. The bad news is that participation rate in the labor force has continued on a downward trend even as the economy rebounds. http://data.bls.gov/timeseries/LNS11300000 http://data.bls.gov/timeseries/LNS11300000 I think a growing economy that does not create jobs should concern us all.

deleted 12y ago
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rayiner 12y ago
Because U.S. demographics are rapidly changing, it's important to look at these figures adjusted for the overall aging of the population: http://crr.bc.edu/wp-content/uploads/2014/02/IB_14-4.pdf http://crr.bc.edu/wp-content/uploads/2014/02/IB_14-4.pdf (page 3). The decline in labor force participation rate is much less than it seems if you adjust for age.
- nostromo 12y ago
  I agree, but still find it troubling. If a person is laid off, or if a person retires and is not replaced, the net effect is still one less job. If population growth continues to outpace job growth, we're going to end up with a nasty game of economic musical chairs.
  - rayiner 12y ago
    Look at page 28 of this PDF: http://www.bls.gov/opub/ooq/2011/winter/art02.pdf http://www.bls.gov/opub/ooq/2011/winter/art02.pdf. From 2010 to 2020, the civilian labor force aged 16 to 55, prime working years, is actually going to shrink by almost a million people. So the population is growing, but more of those people are of ages where it is typical to not work, so labor force participation rate can naturally be expected to go down, even if nothing is wrong with the economy.
    - bjelkeman-again 12y ago
      And if there isn't a good pension scheme in place, public or private, it gets interesting. Palm Springs was an interesting place. The only place I have been where the dinners seemed all full of grannies working the tables.
voronoff 12y ago
Do note that this measure is of people aged 16+, so it decreases with both longer education on average and an aging population (where a greater % of people are retired.)
chvid 12y ago
Yes. I agree. The basic ratio of the number of people working (or rather the number of hours worked) vs. the total size of the population is the number we should be talking about. It is true that this number is affected by people retiring, newborns, immigrants but it basically shows how many (or few) that are producing the goods and services consumed by the whole population. The unemployment number is heavy politized and it is always easier for politicians to hire economists to design measurements that shows a lower unemployment than it is for politicians to actually implement measures that increase meaningful and sustainable employment. I think that the (western) world is in a development that will leave us with much lower employment for good. And this is due to the forces for globalization (such as outsourcing of jobs and manufacturing, global competition) and advances in technology (robots, information technology removing middle men and backoffice functions). Much more so than ageing or immigration. It is important that this becomes a bigger issue in public discourse otherwise we risk ending in bad place with too many people living of welfare and highly skewed wealth and income distribution.
- Moru 12y ago
  I'm affraid that happened already. Look at the US debt.
ojbyrne 12y ago
Perhaps straightforward to measure, but is it actually measuring something useful? People who don't participate in the labour force do it for a whole variety of reasons beyond just being "discouraged" in their job search. I'm sure many people here have chosen to be entrepreneurs, they would be considered non-participants.
Shivetya 12y ago
I would think any determination of employment within a country also account for how many are also on assistance programs. How valid is employment if your not earning enough to keep yourself above the threshold of assistance programs?

deleted 12y ago

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rayiner 12y ago

Because U.S. demographics are rapidly changing, it's important to look at these figures adjusted for the overall aging of the population: http://crr.bc.edu/wp-content/uploads/2014/02/IB_14-4.pdf http://crr.bc.edu/wp-content/uploads/2014/02/IB_14-4.pdf (page 3). The decline in labor force participation rate is much less than it seems if you adjust for age.

nostromo 12y ago
I agree, but still find it troubling. If a person is laid off, or if a person retires and is not replaced, the net effect is still one less job. If population growth continues to outpace job growth, we're going to end up with a nasty game of economic musical chairs.
- rayiner 12y ago
  Look at page 28 of this PDF: http://www.bls.gov/opub/ooq/2011/winter/art02.pdf http://www.bls.gov/opub/ooq/2011/winter/art02.pdf. From 2010 to 2020, the civilian labor force aged 16 to 55, prime working years, is actually going to shrink by almost a million people. So the population is growing, but more of those people are of ages where it is typical to not work, so labor force participation rate can naturally be expected to go down, even if nothing is wrong with the economy.
  - bjelkeman-again 12y ago
    And if there isn't a good pension scheme in place, public or private, it gets interesting. Palm Springs was an interesting place. The only place I have been where the dinners seemed all full of grannies working the tables.

voronoff 12y ago

Do note that this measure is of people aged 16+, so it decreases with both longer education on average and an aging population (where a greater % of people are retired.)

chvid 12y ago

Yes. I agree. The basic ratio of the number of people working (or rather the number of hours worked) vs. the total size of the population is the number we should be talking about. It is true that this number is affected by people retiring, newborns, immigrants but it basically shows how many (or few) that are producing the goods and services consumed by the whole population. The unemployment number is heavy politized and it is always easier for politicians to hire economists to design measurements that shows a lower unemployment than it is for politicians to actually implement measures that increase meaningful and sustainable employment. I think that the (western) world is in a development that will leave us with much lower employment for good. And this is due to the forces for globalization (such as outsourcing of jobs and manufacturing, global competition) and advances in technology (robots, information technology removing middle men and backoffice functions). Much more so than ageing or immigration. It is important that this becomes a bigger issue in public discourse otherwise we risk ending in bad place with too many people living of welfare and highly skewed wealth and income distribution.

Moru 12y ago
I'm affraid that happened already. Look at the US debt.

ojbyrne 12y ago

Perhaps straightforward to measure, but is it actually measuring something useful? People who don't participate in the labour force do it for a whole variety of reasons beyond just being "discouraged" in their job search. I'm sure many people here have chosen to be entrepreneurs, they would be considered non-participants.

Shivetya 12y ago

I would think any determination of employment within a country also account for how many are also on assistance programs. How valid is employment if your not earning enough to keep yourself above the threshold of assistance programs?