
What We Know About the 92M Americans Who Aren’t in the Labor Force - curtis
http://blogs.wsj.com/economics/2015/10/21/what-we-know-about-the-92-million-americans-who-arent-in-the-labor-force/
======
cryoshon
This article doesn't really delve into the percentage of the population that
"doesn't look, but still wants a job". This population is the most important
one as far as generational wealth and health is concerned; retiring and
disabled boomers are to be expected.

Part of this is an intentional misrepresentation of the employment numbers. In
order to be counted as "unemployed" you must first have had stable
"employment". Thus, people just out of high school or college that are unable
to find their first job (which is often extremely hard to come by) are not
counted as unemployed, despite being so. The other problem is that after
unemployment benefits expire, people aren't counted as unemployed anymore, so
the unemployment stat goes down, but the percentage not in the labor force
goes up.

Employment indicators U3/U6 are remarkably poor for depicting gainful
employment in the wake of economic depressions; they're meant to measure
unemployment that is expected to be transient. Super long-term unemployment,
difficulty finding a first job, and underemployment are not adequately
measured, though the part-time employment stat is somewhat taken into account.

~~~
TallGuyShort
I think the whole point of the article was that we need to know more about
that percentage of the population that "doesn't look, but still wants a job",
because dismissive explanations are insufficient.

Does anyone on HN have suggestions of possible explanations for some of that
percentage? I don't understand it. Is it people who wanted a job, but gave up
looking? Other situations that would fall into this category other than simply
"lazy"?

~~~
Mz
Sometimes, people would rather see themselves as _lazy_ or _free spirits_ than
admit to disability. I was acquainted for a time with a homeless man who
seemed able bodied but had a mental health issue. He quit his job and walked
away from his worldly possessions to get off the zombifying drugs required to
make him employable. I have a different disability but made similar choices,
so I am sympathetic. But he was very resistant to admitting that he was too
handicapped to hold down a job. I knew him a while before that became clear to
me. And it isn't anything you would infer at first glance. If you saw him, he
looked tall and strong and able bodied, he sounds intelligent and is
intelligent and the degree to which he is not mentally sound is just not
obvious to casual inspection.

I have two adult sons who have never had jobs. They also look hail and hardy.
They both have some issues. We are still trying to work out how they can make
money in spite of being basically unemployable.

I suspect this happens more than is recognized. My handicap was not identified
until age 35. I got called "lazy" a lot until I had a diagnosis. I am a woman
and was fortunate to be able to hide out for many years behind the title of
_full time wife and mom_.

~~~
cryoshon
I am really curious now. If you are comfortable, can you inform us what your
handicap is called?

~~~
Mz
My official diagnosis is "atypical cystic fibrosis." Does that matter? It
could be ADHD. It could be ASD. There are plenty of things that can
significantly interfere with your functioning that can be missed, especially
if you are above average intelligence.

Twice exceptional individuals very often have seemingly "average" performance
outcomes and the degree to which it tortures them to just achieve "average"
goes largely unnoticed by people who presume them to have an excess of ego for
thinking they deserve something better in life.

~~~
votingprawn
> Does that matter?

No, but when someone alludes to something without saying what it is, curiosity
is aroused in people.

------
michaelZejoop
There is a portion of the spectrum that seems like it is in the "wants a job,
but is not looking" category that is not properly represented. I am in sub-
category of "wants a gainful future (after being laid off - essentially forced
into early retirement - from a long aerospace career) but is not looking for a
job (either in the sector I left, or in the service sector). Aerospace is
notorious for ageism, and I have no future there. I will not look for a job as
a barrista or a clerk at Home Depot, so, no, I am not looking.

I am however trying to create my own future as an entrepreneur and build my
own company. This effort being bootstrapped, on my own dime, using funds that
should have been reserved for retirement. There is a lot of solid engineering
talent and experience that is laying dormant - I am trying to counter that by
building my own asset/company.

~~~
omarchowdhury
Aerospace is ageist towards the older people? That's interesting, I'd think
that experience would be the most important factor in that space.

~~~
michaelZejoop
Once you top out the salary range, and are close to 55 (the earliest age for
reduced retirement benefits) they look for ways to shed you. It happened to
me, and many other colleagues. I have worked on a lot of great projects such
as B2 Bomber, Space Shuttle, UAV Global Hawk and many satellite programs. That
does not matter; once you hit the age/wage criteria, you better have great
connections or you could easily see yourself filing for unemployment.

~~~
Nagyman
That's nuts. You're more proficient and efficient with that experience, which
should compensate for the wage difference between you and a less experienced
colleague.

~~~
lightbritefight
Its short term, bottom line thinking. If you force them out at reduced
retirement wages, that saves pension money you can then bonus yourself with.
You don't care that you are firing your most competent people, because they
are just resource slots you put new, cheap college hires into. They arent as
good, but whatever. You have 2000 of them. They are good enough, right? You
can then bonus yourself with that salary savings as well.

The company will eat itself to death, but that will take years, and you'll
have left to do the same to other companies, using your "success" at this one
to prove you need an insane salary at the new one. Repeat, over and over.

~~~
michaelZejoop
Yes. But imagine this on a scale of the big defense contractors. They won't
'eat themselves to death' as you put it but they are big enough (especially
after major consolidations in the 90's) to sustain this behavior indefinitely.

Unfortunately a large part of their business model relies on fulfilling their
commitment to seat engineers on programs as promised in the contract they
signed with their customer, i.e., the USG. Filling seats is more important
than achieving quality engineering outcomes. There are three big-time losers
in that equation: [1] the taxpayer, [2] the "lifer" employee, and [3] the
warfighter.

------
6stringmerc
Huh, I've seen consistent material over at Zero Hedge[1] indicating that since
2007 the cohort that has made the most job gains is over the age of 55.

" _...while the elderly workers in the US have risen by a whopping 7.4 million
since the start of the Depression in December 2007, workers aged 25-54 are
down 4 million!_ "

As shown in this chart:

[http://www.zerohedge.com/sites/default/files/images/user5/im...](http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/08/Jobs%20by%20age%20group%20LT_0.jpg)

If there's a person here with a good handle on how the WSJ article and the
noted Zero Hedge article relate to one another, I'd be very interested in your
perspective.

[1] Article source, August 2015.
[http://www.zerohedge.com/news/2015-08-07/prime-aged-
workers-...](http://www.zerohedge.com/news/2015-08-07/prime-aged-workers-
tumble-july-workers-55-and-over-surge-new-all-time-high)

~~~
michaelZejoop
What is the nature and quality of the jobs these post 55 people have taken. Do
the jobs they land in compare favorably with the jobs they were displaced
from? Did they go from professional jobs to service sector jobs? This
distinction is important. As a forced-into-early-retirement, former aerospace
engineer, I am curious, and I will check your links later.

As for my future, I am trying to create my own asset/company and I don't see
myself reentering the workforce as an hourly wage earner again.

~~~
6stringmerc
From the data I've seen, yes, they have gone from professional jobs to service
sector jobs - or, at least the data indicates that those are the type of jobs
that are being filled during recent memory. It's been a hunch of mine that the
displaced older workforce's jobs simply don't exist anymore (layoffs due to
technology, better for investors) and the service sector jobs would normally
be for the younger population as they 'move up' through the ranks...but they
can't get in...those spots are taken by the over 55 group. I think that they
almost have to work, e.g. no retirement savings, unwilling to move to
rural/low-income areas where their SSI might be sustainable. Vexing.

~~~
michaelZejoop
The social implications of this scenario are going to be devastating.

I'm doing my best to prepare for my own future (as one of those laid off
early) by learning software development to supplement my systems engineering
skill from aerospace. I do not forsee myself becoming a barrista.

------
oconnore
But the "in the labor force" category includes people who are forced to work
part time so they don't collect benefits, get bumped from job to job, have
unreliable hours, make less than the cost of living, etc.

The graph should be split:

\- Has a reliable full time job with benefits

\- Has a minimum wage job, or is a part time employee/contractor making less
than $20-30k a year.

~~~
_delirium
It's not shown here, but the Bureau of Labor Statistics does further break
down workers into full-time, voluntarily part-time, and involuntarily part-
time [1]. Numbers for part-time workers below are for September 2015.

    
    
        Part-time for economic reasons (6 million)
            Slack work or business conditions (3.6 million)
            Could only find part-time work (2.1 million)
            Other (0.3 million)
        Part-time for noneconomic reasons (20 million)
     

[1]
[http://www.bls.gov/news.release/empsit.t08.htm](http://www.bls.gov/news.release/empsit.t08.htm)

~~~
oconnore
Thanks, so depending on how you count unincorporated, self employed workers,
you get between 3.5% [1] and 9% [2] of the labor force underemployed (not
looking at salary). I suspect there are more Uber drivers than successful
independent consultants, but we don't have data about that.

That's better than I expected.

[1]: (6036) / (2357 + 146464 + 19656) [2]: (6036 + 8357 + 820) / (2357 +
146464 + 19656)

------
nsheth17
The impact of this is going to become so obvious when interest rates start
going up.

Let me explain. Ultimately, how much money the workforce is making matters to
consumer spending. People may be ok not having a job, because they have some
way to stay at their standard of living. But unless a bunch of them are
sitting on family trusts, it also means they don't have a growing amount of
money to spend.

Yet consumer spending has been growing steadily for the last 5 years. How can
that be? The likely scenario is really cheap debt. The kind that disappears
when interet rates aren't basically zero anymore.

We've shoved a lot of stuff under the "free money" carpet. When the Fed bumps
up the interest rates, all those spiders are going to come out to play.

~~~
edc117
Just curious, what do you mean by 'free money'? Most loans I've seen over the
last few years vary from anywhere between 2.5%+ (houses) to 17% (credit
cards). I don't think anyone would think of those as 'free'.

I would think the interest rates going up would actually encourage people to
save more.

------
sjg007
18-22 year olds looking for a job would be more interesting. This measures
post high school and the "in college" fraction.

~~~
_delirium
Yeah, I think these brackets could use reworking for present-day
interpretability. Working-age population traditionally starts at 16 in U.S.
government statistics, since that's the traditional age where both mandatory
schooling, and most child-labor-law restrictions ended. However the first part
of that is becoming less true: currently only 30% of states still allow you to
legally leave school at age 16. Another 20% have extended mandatory schooling
to age 17, and 50% to age 18.

------
choward
I'm most surprised about the all the retired 16-20 year olds.

------
palehose
What about entrepreneurs starting a business that is not yet profitable? Is
that something the government doesn't care about or are the numbers just too
small?

~~~
nostromo
They're counted as employed.

~~~
palehose
Not if there is no investment and no one is getting paid anything yet.

~~~
nostromo
Not true. If you work for yourself and you're losing money and you get polled
by the CPS, you would rightly report that you are self-employed, and you would
be counted as working.

[http://www.bls.gov/cps/cps_htgm.htm](http://www.bls.gov/cps/cps_htgm.htm)

It doesn't matter if there are investors or a profit.

------
aschearer
TLDR: They're students, retired boomers, or sick middle agers.

~~~
001sky
This comment is overly reductionist -- 'disabled' is a code word for long-term
un-employable.

Just eyball the proportion of working adults in the 50 to 60 year range. It is
only ~5x the number of disabled. In other words, that is a huge %--maybe
20%--of potential workers in that age bracket.

Any employment process that disables 20% of its workforce would be normally
considered a problem.

But instead we call the un-employable 'diabled', to sweep the data under the
rug.

It almost certainly helps keep other people in their jobs, tho (like burecrats
and academics).

~~~
intopieces
>'disabled' is a code word for long-term un-employable.

Correct. This is the legacy of the Clinton era 'welfare to work' program: we
moved people from welfare to disability.

This will grow as automation takes hold of ever more industries. "Disability"
is the U.S.'s first step toward guaranteed minimum income or a negative income
tax. We will never have enough jobs for everyone in America, so we need to
figure out what we're going to do to keep the economy going.

~~~
mynameishere
It really has nothing to do with "keeping the economy going". The purpose of
"disability" insurance is just like that of Social Security originally--
keeping people from destitution and poorhouses. It's not a good thing, but an
unavoidable thing.

~~~
intopieces
>It really has nothing to do with "keeping the economy going".

Not sure what you mean. When we give poor people money, they spend it. That's
good for the economy. Welfare and disability are definitely good things.

------
discardorama
I have a neighbor who used to work as a landscaper. The money was decent (in
SF); his specialty was masonry. Then a couple of years ago, he decided to drop
out. Claimed he had MS and started getting SSDI checks of about $2K/month (I
think). After he dropped out, I've seen him lift 100lb stones; frequently,
he'll drive down to Arizona for fishing trips with buddies; and recently, he
drove cross-country to Georgia for a HS reunion, and made it from Albuquerque
to SF in 1 day. All this, despite having MS. I feel, if he can do all these
activities, he can damn well work; but he's been able to fool the system for
the last 3-4 years.

If you look at the SSDI stats:
[https://www.ssa.gov/oact/STATS/dibStat.html](https://www.ssa.gov/oact/STATS/dibStat.html)
it is interesting to see that when the Financial Crisis happened, the number
of applicants jumped drastically; a 34% increase from 2007 to 2009. And as the
economy has picked up recently, the number of applications has gone down; a
15% drop from 2010 to 2014.

While I do support the idea of a "safety net", I don't like the idea of people
dipping into SSDI when they don't feel like working (or can't get work).

Added later: (1330PST): A lot of people are saying that he could just be
having a good day or two. Maybe; but he has enough good days (when I see him),
there's no reason that he would not work on his "good days". Secondly: my last
conversation with him (3-4 weeks ago) was about how he could go about getting
a cash-only gig, and he wanted my opinion (me being a tech guy). I recommended
Postmates/TaskRabbit, but he shied away from those, opting for cash gigs from
Craigslist. Maybe the 1099 would have ratted him out? I dunno.

~~~
toomuchtodo
This is infuriating.

My mother is 58. Her lower spinal column was collapsed, and she's had it
reconstructed using titanium plates and screws during a 6 hour surgery. She
has been denied for disability by the Social Security Administration twice,
and currently has to wait ~500 days for her next appeal
([https://www.ssa.gov/appeals/DataSets/01_NetStat_Report.html](https://www.ssa.gov/appeals/DataSets/01_NetStat_Report.html))
in front of an panel of judges (this backlog is caused by Congress providing
insufficient funding to process said backlog).

How the hell are people who don't need disability getting approved, and the
people who don't need it are stuck in purgatory?

~~~
itsybitsycoder
He doesn't know whether his neighbor needs disability or not, he's just
guessing. MS symptoms are really variable. The fact that he has a few good
days doesn't mean he can hold down a steady job.

~~~
mjn
That's been our experience with my uncle who has MS.

It started as periodic attacks in his late 30s, where for anywhere from a day
at a time, to about a week at a time, he'd have significant difficulty getting
out of bed and moving around (and definitely couldn't drive). But then he
could go for weeks at a time being totally fine; usually about 4-6 weeks, and
in one case a full 6 months. This already started making it hard to keep
employment, though, since employers tend not to like random unscheduled
absences that are likely to continue indefinitely into the future (even if
they understand the reason). Fortunately, he was a lawyer, which is an area
where at the time it was relatively easy to find flexible part-time work. That
worked ok for a number of years. Once the attacks got more frequent though,
even this no longer worked out. Also he was no longer able to maintain a
driver's license. So by his mid-40s he went on disability, even though he was
still ok probably 50% of the time. He would definitely have preferred to keep
working in some capacity if it were possible, because it gave him something to
do, and even his previous part-time job paid more than the $700/mo disability
gave. By his late 40s he definitely couldn't work in any capacity (started
having mental issues in addition to physical ones, and full-time physical
ones), but there's a few years there where it seemed unfortunate that we don't
have a way to better accommodate people who are somewhat but not really fully
able to work.

