Article 43

 

Sunday, August 07, 2016

Whose Not Working

95 million Americans not in the labor force: The army of non-workers in the United States.

mybudget360
August 7, 2016

The United States now has 324 million people.  Of that we have a large labor force.  70 million cannot work and most of those are children.  But what about the rest?  The media largely ignores a massive contingent of people.  This group is made of those not in the labor force.  Today we have a stunning 95 million Americans that are not in the labor force.  So the unemployment rate looks healthier than it is because many of these people are yanked out when calculating the unemployment rate.  It is still the case that we have 1 working person supporting 2 other Americans overall.  This ratio seems to pan out when we break down the numbers.  What are we to make of these 95 million Americans that are not in the labor force?

The big picture on employment

The media tries to make it seem that many that are NOT IN THE LABOR FORCE are there by choice.  Yet that isnt the case.  Many have given up on looking for work or many older Americans unable to find work have retired earlier than planned and are barely scraping by on Social Security.  This somehow is pitched as a positive thing.

But let us break down the entire population with the latest numbers:

image: americans not in labor force 2016

FROM US Census JOB ECONOMIC REPORT JULY 2016:

-You first have 32 million people working for the government

-You then have 95 million people not in the labor force (can work, but not looking)

-70 million absolutely cannot work and these are mostly children

-15 million are unemployed

-112 million are part of the private employment sector

So those 112 million are largely supporting the rest of the country, including those working for the government since they are paid via tax revenues.  This isnҒt a bad thing but this is the overall calculus on how our population is segmented out when it comes to employment.

The real structural changes are seen when we look at the participation ratio for employment:

image: us employment to pupulation ratio

We are a long way from peak employment.  The recession pain is still seen in these figures and that is why people are still incredibly angry even though the stock market is near a peak and the housing market is also near a peak in terms of prices.  As we have highlighted before though, the homeownership rate is at a half century low (meaning fewer families as a percentage are owning their homes).  This of course is largely due to the bailouts favoring big investors and Wall Street when it comes to purchasing homes.

What can we do about those not in the labor force?  A large portion are retired but many are retired and are living day to day.  The new retirement model is working until you die.  95 million Americans are not in the labor force and not a peep is uttered about this in the mainstream press.

SOURCE

Posted by Elvis on 08/07/16 •
Section Dying America
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Saturday, August 06, 2016

How Low-Skilled Workers Could Rescue the US Economy

Their re-entry into the labor force will help power a revival in growth over the next decade, a Harvard economist argues

By Adam Creighton
Wall Street Journal Blogs
August 2, 2016

Remember those low-skilled workers, the ones who are disappearing from the work force because globalization and technology have passed them by? The ones whose economic frustration is driving populist politics around the world? 

New research by Harvard economist Dale Jorgenson offers a cheerier outlook for both them and economic growth.

His new study, which breaks down THE FORCES PROPELLING US GROWTH SINCE 1947 - the year the transistor was invented - and projects them forward to 2024, anticipates a boom in LOW-SKILLED WORK that rekindles economic growth to the tune of 2.49% a year from now till then, a little above the 2.34% experienced from 1990 to 2014.

“Those workers will fill service jobs in a growing economy,” he suggests.

“While the average quality of the labor force will begin to flat-line, the number of hours worked will rebound as employment-participation rates flick back to near where they were before the Great Recession, the paper says.” Among men and women ages 25 to 35 with only high-school qualifications, these rates are still 10 percentage points below their peaks in the early 2000s (at just under 80% and 60%, respectively).

“There are a lot of hours out there that aren’t being employed properly and they will be employed,” Mr. Jorgenson said in an interview, noting participation rates were already starting to rise as wages rose and employers struggled to fill positions.

“Some of the pessimism about the growth outlook stemmed from a misreading of the past and a misguided faith in official economic statistics,” he said.

Paul Krugman famously said “productivity isn’t everything, but in the long run it is almost everything.” But Jorgensons paper, written with a senior economist at the U.S. Bureau of Economic Analysis, shows increases in capital and labor have accounted for 80% of economic growth in the U.S. since 1947.

Capital contributed 50% and improvements in the quality and amount of labor 30%, the economists found, leaving total factor productivity - typically seen as a black box, the excess of economic growth over and above improvements in labor and capital = contributing 20%.

“The standard story doesn’t have as clear a concept of the quality of the labor and quality of capital that goes into growth,” Mr. Jorgenson said.

The study does point to a one drag on growth: a looming plateau in educational attainment as the higher-education sector reaches a saturation point. Almost 40% of young Americans enter the labor market with college qualifications, more than double the level of the 1950s. “There’s a limit to how many can go. There are diminishing returns to having more people in study,” Mr. Jorgenson said.

But the Harvard professor also said that national statistic agencies over the last decade have failed to adequately capture the falls in prices of some goods and services, such as cloud computing, which were spreading rapidly throughout the economy. That would understate the contribution of information technology to investment and GDP growth, for instance.

“There’s quite a lot of evidence that the economy is growing faster than we think,” he said.

SOURCE

Posted by Elvis on 08/06/16 •
Section Dying America • Section Workplace
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Thursday, August 04, 2016

Smart Immigrants

image: unemployed teen

Q.Why are all doctors’ names hard to pronounce?  A.Because none are Americans. 

Q.How can colleges get away with letting my granddaughter take her final exam at home on her laptop with me standing on her left side, and her equally intelligent boyfriend standing on her right, both helping her out with answers?  A.Because schools are a joke.

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Michio Kaku on Why Immigrants Are Americas Secret Weapon: They Compensate for Our Mediocre STEM Education & Keep Prosperity Going

Open Culture
August 3, 2016

Americans have often found themselves caught up in panics about immigration, like that now driving the campaign to build a wall between us and our third largest trading partner - when MORE MEXICANS ARE LEAVING THE US THAN ARRIVING. Then we have the talk of banning an entire world religion, though, of course, weve seen this before, lest we forget that the Klan resurged in large part AS AN ANTI-CATHOLIC GROUP. All of this misinformation, mistrust, and outright contempt comes at a high cost, including that of any real understanding of how immigration works, and why it works, no matter how vehemently certain organizations fight against it.

The fact is that the U.S. might be a dynamo for capital but not when it comes to what economists crudely call “human capital.” The point applies not only to immigrant workers who do jobs Americans won’t, but also those who do jobs Americans cant, because, as PHYSICIST MICHIO KAKU argues above, ”the United States has the worst educational system known to science. Were it solely up to U.S. graduates, the scientific establishment and tech economy would collapse,” he says, “forget about Google, forget about Silicon Valley. There would be no Silicon Valley.” Instead, U.S. science and tech thrive because of immigrants who come on H-1B visas, “Americas secret weapon” the genius visa.

Kaku goes on to press his case with daunting statistics about the number of foreign-born Ph.D. graduates, though he doesn’t say that all of those grads have H-1Bs. In fact, his position is a highly controversial one. Reliable studies show that many companies abuse the specialized work visa to outsource jobs Americans are fully qualified to do, and to create a class of immigrant workers who earn less than their U.S. counterparts and work under a modified form of indentured servitude. The visa is, after all, a non-immigrant visa,Ӕ points out one critic, and so has nothing at all to do with staying in the USA, becoming a citizen, or starting a business.Ӕ It is, more or less, a guest worker program.

Kaku’s tone can also seem grating, a smarmy reminder of what David H. Freedman calls in The Atlantic “open season on the nonsmart.” Calling American grads ԓstupid will not likely endear many of them to his position. Nonetheless, when it comes to science education, itԒs hard to argue with his assessments, and with his case for allowing the best minds in the world to come work for American companies (under more equitable conditions). In the BIG THINK VIDEO, Kaku again presses his argument for the H-1B as instrumental to a “brain drain” into the United States, feeding its science and tech industries with fresh minds and fresh ideas constantly. His ideas about meritocracy may seem blithe, especially given the material advantages so many guest workers already have before arriving in the States. But in purely descriptive terms, the best U.S. graduates just simply cannot compete with many of their foreign-born colleagues.

Here Kakus argument takes a turn in both these videos and shows how the “secret weapon” is one we’ve pointed at ourselves. We can’t continue to depend on “geniuses from other countries,” he says, to prop up our science and technology sectors, especially since the brain drains back out, with H1-B visa holders frequently leaving, given their temporary status, and establishing companies in their home countries. “In reality” WROTE MOTHER JONES IN 2013, “most of todays H-1B workers don’t stick around to become the next Albert Einstein or Sergey Brin.” That year, “the top 10 users” of H-1B visas were all offshore outsourcing firm that hired nearly half nearly half of H1-B workers. As one expert explained, “The H-1B worker learns the job and then rotates back to the home country and takes the work with him.”

It’s likely large numbers of those workers feel less and less welcome in the U.S. But its also true, as Kaku says, that Americans CONTINUE TO FALL BEHIND IN MATH AND SCIENCE. There may indeed be few Americans who can fill many of those jobs or continue to push technological innovation forward in the U.S.

SOURCE

Posted by Elvis on 08/04/16 •
Section Dying America
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