It depends what you mean by “in the labor force”

Today’s employment news is that new jobless claims are higher than expected, and employment costs are up, mostly because benefits cost more than they used to. So maybe you heard yesterday that the American economy added 128,000 jobs in October. The fact that these stats came out before the ink was even dry on some of those paychecks should alert you to the fact that these are preliminary numbers, subject to revision. Don’t let that worry you, however. Worry about the fact that this number is far lower than the 150,000 to 200,000 that the American economy needs each and every month to keep up with people who are just joining the workforce.

Or maybe, don’t worry about that too much?

An item in The Economist suggests that the American economy is slowing, and it might be because the workforce is contracting. Something called the “labour force participation rate” is falling (they’re British). And why is that? They blame retiring/near-retirement baby boomers, women who are dropping out of the workforce, and teenagers who are not working.

Let’s take a close look at those boomers. Sure, some of them will be able to retire, but I think it more likely that the majority of them will scale back their work. Joe Average doesn’t have enough savings for a prolonged retirement in an environment where the politicians have been shouting at him for years that he can’t count on Social Security and it’s all his fault for being one of the millions of babies born after World War 2. However, as much as Joe wants to work, the fact of the matter is that for many people like Joe, health concerns are beginning to affect the ability to get up and go do a job every day. This is particularly true for people in physically demanding occupations.

As for women dropping out of the workforce, there are two separate things going on. First, I think there is a large group of women who lost their jobs early in the Bush Administration, and having failed to find a new job in a timely fashion gave up. But instead of calling them “discouraged workers” we are falling back on the fact that they have kids at home. Having no money for childcare, these women have become de-facto stay-at-home-moms (SAHMs). But the second thing that happened — both to these women and those with different circumstances — is far more interesting. This post from *itch, PhD sums it up nicely:

My observations suggest that at least some, if not a majority of stay home moms and dads are not only working as parents and housekeepers; they also serve as unpaid support and teaching staff for local public schools, unpaid case managers and caregivers for sick and elderly relatives, and unpaid volunteers/part-time help for a wide variety of social services and programs including libraries, hospitals, art, music, and sports programs, and political organizations…. But the point remains: a lot of stay-home parents are doing a lot of unpaid work to keep society running.

The women who are not counted in the official workforce are doing vital work that they couldn’t afford to pay someone else to do. And that doesn’t even account for those who — like me — do not receive a paycheck but through various Department of Labor loopholes are officially “employed.”

And that brings us to the last group mentioned by The Economist, teenagers and young adults. They tell us:

This decline is a bit of a mystery, since job growth in the kinds of industries that tend to employ young people—restaurants and shops—has been well above the national average. It may have happened because teenagers are staying at school or college longer, and are working less on the side. More education may mean higher future productivity, but in the medium term it cuts the number of available workers.

Oh it would be easy to say it’s the fault of No Child Left Behind, and say that fewer teens in the workforce is the result of higher academic requirements. It isn’t that simple. Those “kinds of industries that tend to employ young people” have much greater choice in employees than they used to. Even the ultra-conservative Heritage Foundation admits that 53% of minimum wagers are under 23, so that must mean 47% are 23 or older. The reader is left to wonder what the percentages would look like if we discussed workers younger than 19. Some sources imply that adults are up to 80% of the work population that earns under $7.25 per hour. It is reasonable to say that probably about half the jobs that have traditionally been held by young people are now held by their elders. And frankly that’s a sad statement about the economy. It is also worth mentioning that more college kids have loans than part time jobs, and that changes to vocational education are having an unknown effect on the issues.

The one thing it all adds up to is that the unemployment rate is artificially low because of people who can be — and probably should be — in the work force, but are not.

In closing: on CNBC, great documentaries run as often as they can get away with it; do slave laborers in the Marianas Islands count as part of the American workforce?; on being an Iraqi woman; next country over cash for the vacation of a lifetime, as long as you don’t mind the people who would rather you were dead; treat kids like animals and then act all surprised when they live up to your expectations, be sure to read the second page, about how the school library has exactly zero books; if the Feds knew where 10,733 gang members, kidnappers, child molesters, sex offenders, carjackers, and burglars were, why did they wait until two weeks before a national election to arrest them?; and finally, smile, and start up a random conversation, because you never know where it will lead.