34% of all Americans financially support the rest of the country – 112 million private sector workers support 211 million people.
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The latest employment report was lackluster. The math on the employment numbers has concealed a deeper problem in the economy. Many Americans are struggling and the middle class continues to lose ground. The most startling figure coming out was that 562,000 people dropped out of the labor force. While there is a bit more information on those “not in the labor force” the press is still largely quite on this issue. You can frame the topic in a more poignant way by saying that 34 percent of all Americans financially support the rest of the country. With an aging population and record levels of debt, this might be a problem.
1 out of 3 Americans supporting the rest
The reality is that 1 out of 3 Americans is supporting the rest of the country. We are talking about the private labor force since government work is supported by this group as well. We have over 94 million Americans not in the labor force. Another 16 million Americans are unemployed but looking for work.
The numbers make more sense when you look at a chart:
Source: Jobenomics, BLS
It might be worth breaking down the categories:
112 million in the private sector labor force – this is largely the 1 out of 3 supporting the rest of the country
32 million government workers – this is supported from funding coming from tax revenues
94 million not in the labor force – these are people that can work but are not looking
70 million cannot work – this is mostly children
16 million unemployed – looking for work and unable to find a job
This should give you a good sense as to how the economy is doing. The not in the labor force category is really worth exploring further. We have many older Americans hitting retirement age but completely unready to face the financial burden of retiring. The assumption is that once you hit 65 you have all the money in the world to get by. The reality is starkly different in that most older Americans are one Social Security payment away from being homeless on the street and starving.
Last month those not in the labor force increased by 562,000:
This is a big issue here.
Going back to the private labor force, it should be noted that roughly 40 percent of the labor force is part of the contingent labor force. Many of these people are part of the new low wage America where benefits are little to nonexistent. This is also another reason why new home sales or building is simply not picking up. Why would you commit to a 30 year mortgage when you are drifting from project to project?
So what we have is fewer workers supporting a growing number of people not generating income. And the expenses of our country only continue to go up. Basic math will tell you that something is going to give at some point.