2/27/2012

Unemployment Rate, Labor Participation Rate, and How Many Jobs it takes to Keep Up With Population Growth

People are often confused with biased media reports that "unemployment" is going down, and that's supposedly a good thing. There's much more to the picture - but you'll never hear it from the media.

The number of jobs needed per month to keep up with population growth depends on the rate of population growth, and the labor participation rate.

CBO estimates show we need 260,000 new jobs per month just to keep pace with population growth (new Americans entering the labor force).

It would take 187,000 jobs added per month over the next year to hold the unemployment rate steady if the participation rate rises to 64.6%. If the participation rate stays steady, it will only take 95,000 jobs added per month.

If the economy does start adding more jobs per month, one would expect more people will then join the labor force - keeping the unemployment rate elevated. Of course more people could give up, and the labor force participation rate could fall further pushing down the unemployment rate - but that wouldn't be good news. In other words, a declining unemployment rate only tells a small part of the whole story.

2/05/2012

On the Madness of Modern Liberalism


The egalitarianism and welfarism of modern liberal government are incompatible with the facts of human nature and the human condition. But the rise to power of the liberal agenda has resulted from the fact that the people of western societies have irrationally demanded that governments take care of them and manage their lives -- instead of protecting their property rights. The liberal agenda gratifies various types of pathological dependency; augments primitive feelings of envy and inferiority; reinforces paranoid perceptions of victimization; implements manic delusions of grandeur; exploits government authority for power, domination and revenge; and satisfies infantile claims to entitlement, indulgence and compensation.

Modern liberalism rejects, to one degree or another, the competence and sovereignty of the common man and subordinates him to the will of governments run by liberal elites.
The modern liberal reveals his true character, including his madness, in what he values and devalues, in what he articulates with passion. Of special interest, however, are the many values about which the modern liberal mind is not passionate: his agenda does not insist that the individual is the ultimate economic, social and political unit; it does not idealize individual liberty and the structure of law and order essential to it; it does not defend the basic rights of property and contract; it does not aspire to ideals of authentic autonomy and mutuality; it does not preach an ethic of self-reliance and self-determination; it does not praise courage, forbearance or resilience; it does not celebrate the ethics of consent or the blessings of voluntary cooperation. It does not advocate moral rectitude or understand the critical role of morality in human relating.

The liberal agenda does not comprehend an identity of competence, appreciate its importance, or analyze the developmental conditions and social institutions that promote its achievement.

The liberal agenda does not understand or recognize personal sovereignty or impose strict limits on coercion by the state. It does not celebrate the genuine altruism of private charity. It does not learn history’s lessons on the evils of collectivism.

This is the madness of the liberal mind. But you can vote it out of office. There's still time.

2/03/2012

Economics 101

We get a lot of confusing information from the media. One important figure that consistently gets under-reported is the Labor Force Participation Rate. This is the percentage of working-age persons in an economy who:
Are employed, or
Are unemployed but looking for a job

Typically "working-age persons" is defined as people between the ages of 16-64. People in those age groups who are not counted as participating in the labor force are typically students, homemakers, and persons under the age of 64 who are retired.

The Labor Force Participation Rate is currently at a 30 year low. We just had the largest absolute jump in 'Persons Not In Labor Force' on record...and biggest percentage jump in 30 years:

Participation Rate

When the Labor Force Participation Rate starts going back up, and unemployment rate goes down, then you have a real economic recovery. Right now we aren't even adding enough new jobs each month to keep up with population growth.

The numbers are hard to track because the BLS updated their population figures for the new year to reflect the changes from the census. The workforce population now stands at 242.269 million, up about 1.7 million from last month. Obviously the population didn’t grow by 1.7 million in one month; those numbers reflect updated data from the BLS.
So there are now 1.2 million more people who are not in the labor force relative to the population. The labor participation force rate now stands at 63.7%, the lowest in 30 years. That is a very unhealthy labor force.

FACT: If the labor force participation rate were at the same level it was when Obama took office, the unemployment rate would be 11%.