Monday, November 21, 2011

An Inconceivable Truth: 53.9% Real U.S. Labor Participation Rate

Even if you still haven't seen the Charles Ferguson, Sony Pictures Classics documentary Inside Job, which receives an unheard of 97% rating on Rotten Tomatoes, we now know that we pretty much can't believe a single word out of a single mouth on Bloomberg, CNBC, or any of the financial media. So today, we shed light on one of the most potentially disruptive and disturbing measures of just how delusional the current conversation about the Job Trance has become.
The current mathematical fact is this: nearly half of all Americans, an inconceivable 46.1% over the age of 16, are non-participants in the Civilian Labor Force (CLF), today.
That's right, a 53.9% Real Labor Participation Rate means a 46.1% total jobless rate. Right now. November, 2011. Not 9%. Not even the begrudgingly acknowledged U.S. Bureau of Labor Statistics (BLS) U-6 measure of 16.2%, as of October, 2011. 

Nope. Not 9. Not 16. A full 46.1% of Americans over the age of 16 in America are JOBLESS, right now, and we're gonna' break it down for you in real time, right here: the almost staggeringly inconceivable truth that the current financial reporting house of mirrors is set up to distort, divert, and deceive worker ants from seeing plainly. It's not a conspiracy, it's plain old diversion and deception.

Unemployment and the Civilian Labor Force Participation Rate

When most people hear the standard headline numbers of "9% unemployment" or "16% unemployment," what do they imagine? If you're like most, those numbers might conjure a picture where 100 people live in a village and 5 villagers don't have a job. Or, when things are really bad, 16 people of the 100 don't have a job. Either way, in the worst possible case, 84 people of the 100 are in great shape (employed, anyway) so what's there to complain about, right? Things should drift back to normal any day now; certainly there is no need for drastic action like an emergency basic income act.

That's exactly what the Wall Street econo-charlatans want you to believe, and it's astounding just how well it's worked, for so long. 

So, let's get to the bottom of this supposedly simple measurement scheme. According to the U.S. BLS, the U-6 number is "a percent of the Civilian Labor Force plus all persons marginally attached to the labor force." But what is this Civilian Labor Force, exactly? For that definition, we need to refer to the Labor Force Statistics from the Current Population Survey, where we find the latest October 2011 Civilian Labor Force Participation Rate of 64.2%. 

Like every jot and tittle on this blog, don't believe me, look it up for yourself. Here's what you'll find:

Labor Force Statistics from the Current Population Survey
Data extracted on: November 20, 2011 (10:01:11 PM)
Series Id:  LNS11300000
Seasonally Adjusted
Series title: (Seas) Labor Force Participation Rate
Labor force status: Civilian labor force participation rate
Type of data: Percent or rate
Age: 16 years and over

Civilian Labor Force (CLF) Participation Rate

What does all this mean? It means that due to the exponential efficiency of information technologies and the globalization of business, the U.S. Civilian Labor Force Participation Rate has been on a rapid downhill slide for at least the past decade, resting now at 64.2%. We are a civilization far closer to a technological singularity than a return to anything even remotely resembling full employment. Pick your favorite comforting fiction, the facts remain.

In 2012 we live in a completely different kind of civilization from 1912.

To put a positive spin, as I'm keen on repeating, we are the victims of our own astronomical success. We are so productive and efficient as a post-information age society, that nearly 50% of Americans, age 16 years and over, are not among the Civilian Labor Force and never need to be, ever again. 

What we've learned is that when mainstream corporate media refer to the peripheral U-3 and U-6 measures of unemployment, they are talking about fractions of the Civilian Labor Force, a term we've never heard explained or discussed in the mainstream. Therefore, when we read of 16% U-6, that means sixteen percent of the CLF, which is 16% of 64.2%, or 0.1027. That is 10.27% of the whole, further subtracted from the 64.2%. 

64.2% CLF - 10.3% Net U6 = 53.9% Real U.S. Labor Participation
Roughly half of all Americans, 46.1% over the age of 16 are jobless, non-participants in the Civilian Labor Force, today.
I heartily invite mathematical refutation of these numbers. It can't be done. Econospin word blenders can be used to mince and chop interpretations into various viscosities of indecipherablility, but the numbers are what they are.

So, by all means, let's keep fixating on the fiction of jobs, jobs, jobs and the make believe "unemployment rate" that has increasingly nothing to do with the real lives of growing numbers of Americans living in RV's, campers, cars, and tent cities across the United States. Put another way, if this isn't the end of the Job Trance, the clarion call to all out War On Poverty, and the wake up call to an absolute National Economic Emergency, then I surely don't know what is.



  1. So, if I'm understanding correctly, there are 46.1% people without jobs if you start including people who aren't looking for jobs? E.g. students, stay-at-home parents, etc.? Or is the division between the U6 and the total jobless in the CLF based on something else?

  2. U3 and U6 are fractions of the CLF, but the way they are bandied about in the media, people think U3 and U6 are fractions of the entire population. This is intentional.

    One key question is: how do you just stop counting Human Beings, regardless of their role in society? They still exist. They still contribute. They are still WORKING on degrees, raising families, developing new skills. This is all WORK; even if the crass don't acknowledge them as legitimate Justification Of Being (J.O.B.s) All this off-balance-sheet WORK contributes significantly to GDP, but doesn't get recognized or proportionately rewarded.

    Yet, those are all details. The salient observation is that our civilization is so advanced, that we create 100% of the required goods and services for the entire domestic population with only about half of people in the work force. The market doesn't want or need any more than that. The current situation is the embodiment of that reality. Were this not true, we would not be where we are today.

    We first need to see accurately where we are in order to decide where we're going.

    Thought experiment: if you watched an episode of Star Trek where a society had become so efficient that it only needed half of it's humans in the work force, how would that society be depicted? Would the half that worked kick the other half in the teeth, leave them living on sidewalks and spit on them as they walked by? Would the work week be dropped in half so that everyone had 20 hr work weeks? Would circulation models adapt so that the resources of the entire society, including the astronomical value of raising children, be recognized and circulated in a more sustainable way that recognizes human value across the entire spectrum of society?

    These scenarios must also account for the fact that efficiency keeps accelerating and the labor participation rate will keep dropping. This is good and successful industrial automation.

    We must shake off the malaise of the tired rhetoric of the past two centuries and open our eyes to the current decade and the centuries ahead. It's not about jobs bill or no jobs bill. America has reached a pinnacle of achievement never before realized in history and we need to show the way FORWARD, beyond the successful industrial capitalist model of the past two centuries.

    Clawing back the 19th century from the rest of the developing world is functionally regressive and culturally retarded.

    The question facing the post-industrial-capitalist societies today is: What happens after we win that game, beat that level? How do you evolve into a flourishing post-industrial, post-information society, so that others have an incentive to FOLLOW your path, rather than point at you as a mockery and object lesson on how NOT to traverse the arc of cultural history?

  3. I just came across this post again. I'm still trying to understand it.

    The CLF data you're using, is that the same data from here?

    Because that data shows CLF participation at 46.6% in 1840. It's been rising ever since, save for a drop in the 1930s — last time there was a depression.

    Admittedly, we were already starting to see postscarcity emerging during the Great Depression, and it certainly wasn't ended by the market. But still, I'm not seeing how these CLF statistics are the smoking gun this post seems to be indicating they are.