What happens when 100 million Americans are not in the labor force? More pressure is being added on the one-third of working Americans supporting two-thirds of the population.

It is hard to believe but we have over 92 million Americans not in the labor force.  I’ve paid close attention as to how the media presents this group and they usually attribute it to older Americans retiring.  The problem with this narrative is that it gives the impression that many have the means to retire and also, that many of these are older people.  That is not true.  Many older Americans are dropping out and fully relying on Social Security so they do not fall into a life of financial destitute.  Many others including younger workers are oscillating in and out of the low wage economy.  This entire shadow group which is getting close to one-third of our nation is largely discounted in the media.  The unemployment rate looks fantastic because every month, we have more Americans simply being erased off the financial ledger.  At this current rate, we will have 100 million Americans not in the labor force by 2020.

The race to 100 million

Whenever I tell people that one-third of working Americans are supporting two-thirds of the country they find the figure hard to believe and full of hyperbole.  Unfortunately this is the reality of the current situation.  We can break down the figures and get a better perspective.  Math is math after all.

Here is the population broken down:

319-Million2

Source:  Jobenomics, BLS

What you have is 108 million private sector employees kicking in revenues to support the entire US population of 319 million.  Now some are clearly not in the labor force for obvious reasons like children or Americans with health issues.  But much of the growth that has recently occurred has been because of the poor performance of the economy.

We have added 12 million Americans to this “not in the labor force” category only in the last few years:

not in labor force

You will see that the recent recession has accelerated this movement beyond your regular population growth:

population growth and not in labor force

This is where the main issue is.  The rate of growth for those not in the labor force is growing faster than the actual population.  We find these issues hitting younger Americans as they now find themselves supporting many more Americans, including many that now rely on Social Security and Medicare as their main sources of retirement support.

What brought this all on?  It was our lost decade in job creation:

Lost-Decade1

Even though we have been adding jobs since the Great Recession ended many good paying jobs that were lost are now being replaced by low wage employment in the service sector.  It was interesting to see so much of the holiday marketing come in with a pitch to buying more goods with debt.  Companies know Americans are tapped out but the economy runs on consumption.  So more debt it is.

At this rate, we will have 100 million Americans not in the labor force by 2020.  This is going to have a big impact on social services and the way our economy runs.  Of course this story is going to be buried deep into the wonky economic pages but this is a very important matter.

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4 Comments on this post

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  1. Seasoned_Citizen said:

    Folks—the career politicians, corrupt Wall Street, and the banksters have RUINED this economy.

    Sad to say, in my humble opinion, the economy, is like a train, which is entirely off the track. Sure, it will still huff and puff for a while, and the impulsion of forward motion (inertia) may keep it going a bit, but it’s DOA. Going nowhere fast. A “Zombie” economy.

    All I can hope for is to see this elitist group of statists get their “just desserts” when the economy grinds to a halt.

    A word to these “leaders” of our economy–best you get your visas in order and have a “bug-out” country to flee to. When the shtf, it’s going to be “open season” on you wrecking-ball experts. It ain’t gonna be pretty…

    November 29th, 2014 at 4:25 am
  2. Ron said:

    I thought when i kept seeing jobs leaving for China it wouldn’t be good for the country. As a trucker ,Someone would tell me about a company packing up and leaving.This went on for years and at least several times a month as i drove all over the U.S. No long term thinking going on. Free trade cost us. Jobs. I’m sick of hearing about hi tech jobs. There just isn’t going to be enough. The government needs to do more to protect jobs,Tariffs and Taxing of companies to make jobs stay here.
    Having an open border doesn’t help either.

    November 29th, 2014 at 10:04 am
  3. NOTaREALmerican said:

    Well, luckily for the US, because we’ve had above-average children being born for many generations now, we’re about to see the results of all these above-average people solving America’s most pressing problems.

    Now would be a good time to buy stocks, before the above-average solutions are implemented.

    December 1st, 2014 at 3:32 pm
  4. transportationandtollstoohigh said:

    Thank you for stating actual figures. I realized that employment had to be a lot higher than stated because after you don’t receive an unemployment check, even if your not working, you are not part of the statistic. The graphs and percentages on the economy, unemployment, etc… showed daily and weekly are way way way off !

    December 10th, 2014 at 1:36 am

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