In the last year alone we have added 2.1 million Americans to the “not in the labor force” category. This mysterious category continues to grow and is having a field day with the employment data. It is hard to ignore this number because it represents a large portion of our population that is simply not counted in the labor force data. You have older Americans in this category but you also have a large number of people wanting work and simply not being able to find it. You also have many relenting and taking up work in the low wage segment of our economy. The unemployment rate would have you believe that this is a fantastic recovery but in March alone we added 277,000 to the not in the labor force category while only 126,000 jobs were created. It is becoming more apparent there will be a strain on the one-third of Americans supporting the other two-thirds.

Non-working America

There seems to be this selective blindness to this group. The narrative that tries to explain this growth away is that older Americans are simply retiring. This is more myth than fact. First, retirement assumes that many older Americans have the means to retire. The reality is, half of older Americans on Social Security would be in poverty if it were not for that monthly check. Many older Americans are working into old age because they have to. Another segment is the group of people meandering in college. Most are there to gain an education and grow. Many are there going into deep debt with a degree that will probably yield very little in the marketplace.

We have some significant structural issues to confront here. Take a look at this growth:

93.2 million Americans are now not in the labor force. In the last year alone we’ve added 2.1 million to this category. This is a staggering amount to an already large group. What makes it more difficult is that you have a larger burden of production being placed on those in the private sector. One-third of Americans are supporting two-thirds of the population:

“Those in the private workforce are basically keeping things rolling for the rest. Now in this category of non-workers you have retirees and children but a big number is coming from people that should be working if this was truly some broad based recovery.”

The recovery is selective at best. It has helped the rentier class do better by juicing up the stock market and punishing savers. Wall Street has done a great job of crowding out the housing market making rents and home prices higher just because of the easy money policy used to bail out banks. But how has this helped the overall economy? You have most jobs coming in the low wage service sector and income growth is stagnant.

93.2 million Americans are not in the labor force, a record number that can’t be simply accounted for by retiring Americans. And keep in mind that many older Americans are going to rely heaving on Social Security and Medicare as healthcare costs rise. Where is the money going to come from? Many young workers are just trying to get by and shifting demographics are going to make this inverted pyramid a difficult task to carry forward.

Those not in the labor force is largely ignored by the press because it doesn’t show up in the headline unemployment rate. So what that we added 277,000 to this category last month alone? It is as if this group just disappears off the statistics chart every month. However having 93.2 million not in the labor force is a hard number to ignore.

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