America's Effective Unemployment Rate Is Far Higher than the Official Rate Indicates
4% Is Way Too Low
One of the main problems we face today is that what we are told by the institutions Americans used to respect is often untrue, or at least not the whole truth.
According to the generals, Iraq was a victory. According to the foreign policy establishment and historians, the “Rainbow Nation” of South Africa is a massive success compared to apartheid. And according to the economic authorities, CPI is low and has been low and the unemployment rate is in a healthy spot.
Are any of those claims true? Well, the lie is in what they leave out. America’s military might have crushed Saddam’s and won nearly every tactical engagement with al-Qaeda in Iraq, but Iraq itself is now in the orbit of Iran, our main enemy in the region. So no victory there. Is South Africa better off now that it’s the Critical Race Theory nation?1 If you’re a corrupt government official or murderous thug, then absolutely. But if you’re a normal person trying to live your life, then South Africa is a living hell thanks to the pro-CRT, pro-white genocide policies of its government.2 Is inflation low? Only if you use their byzantine formula to remove “hedonic adjustments” from the calculation, which essentially means not taking price increases into account because the good at issue got “better.”3
In each case, the lie is obvious upon just a bit of inspection, with the reason for the lie being equally obvious with a bit of thinking. The warmongers, defense contractors, and the like don’t want to give up foreign intervention and the profits that come with it, so they declare victory where none occurred. The CRT-pushers want to turn America into South Africa, so they gild the rotting hulk of that state to hide the hell it has turned into in the hope people won’t wake up to what their ideology created. The economic powers that be profit from easy money, so hiding the high inflation those loose fiscal policies are causing is in their economic interest.
All that is to say, it’s obvious that the regime is lying about nearly everything, and the reasons for it are self-interest and ideological promotion. If ever the truth gets in the way of their ideology or ability to profit off of it, the truth is what’s left in the rear-view mirror. And that is exactly what’s happening with the true unemployment rate, a number far higher than the powers that be want to admit, as the truth of the matter indicates the utter failure of their policies.
Look at the Labor Force Participation Rate
The official unemployment rate in the United States is, according to the Bureau of Labor Statistics, 3.7% for November of 2023.4 Biden promptly declared victory when that number was released, saying, “The economy created 199,000 jobs in November, for a total of over 14 million jobs since I took office. That’s more than 14 million additional Americans who know the dignity and peace of mind that comes with a paycheck. The unemployment rate has remained below 4% for 22 months in a row, and inflation has fallen by two-thirds. Workers’ paychecks and household wealth are higher now than they were before the pandemic, after adjusting for inflation. On my watch we have achieved better growth and lower inflation than any other advanced country. A year ago, forecasters said it couldn’t be done.”5
His claim about jobs was gibberish, as those jobs he “created” were just jobs brought back after the Covid restrictions ended. But more so, his claim about the unemployment rate being low and staying low is, like the claims about everything from South Africa to CPI, misdirection at best.
Looking at what exactly the Bureau of Labor Statistics said is helpful in showing what the Biden Administration, and indeed everyone who points to the unemployment rate is covering up when it claims that the job market is in a good spot. Here’s an extract from the November of 2023 Bureau of Labor statistics report on joblessness in America (emphasis added):
The unemployment rate edged down to 3.7 percent in November, and the number of unemployed persons showed little change at 6.3 million.
Among the major worker groups, the unemployment rate for teenagers (11.4 percent) edged down in November.
The jobless rates for adult men (3.7 percent), adult women (3.1 percent), Whites (3.3 percent), Blacks (5.8 percent), Asians (3.5 percent), and Hispanics (4.6 percent) showed little or no change over the month.
In November, the number of long-term unemployed (those jobless for 27 weeks or more) edged down to 1.2 million. These individuals accounted for 18.3 percent of all unemployed persons.
The employment-population ratio increased by 0.3 percentage point to 60.5 percent in November. The labor force participation rate was little changed at 62.8 percent and has been essentially flat since August.
[…]
In November, the number of persons not in the labor force who currently want a job was 5.3 million, little different from the prior month. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job.
And in that short summary, the problem becomes obvious once you start to dig in a bit: the “unemployment rate” that Biden and others point to. “Unemployment” is at just 3.7 percent, with 6.3 million people included in that category. But, if you include those who want a job and don’t have one but also don’t fit the narrow definition of “unemployed,” that means there are 11.6 million Americans without jobs who want one. Just that change means the unemployment rate is about 6.54 percent (11 million out of a civilian labor force of ~168 million, the number given by BLS for November).6
But it gets worse from there. That’s assuming that the American civilian workforce, as given by the BLS, is actually 168 million people. But the “civilian non-institutional population” is ~269 million people. The “civilian labor force” is just 168 million. So what’s the issue there? From where does that gap come?
That gap is the labor force participation rate (LFPR), and it’s one of the massive, lurking issues in the American economy. It is calculated by taking the civilian labor force, or people working or looking for work, and dividing it by the civilian non-institutional population, or people over age 16 and not in the military, a nursing home, or jail and prison.7
If you look at that metric, right now, the LFPR in America is just 62.8%. Or, put more plainly, roughly four out of every ten people who are working age in America are not working. That’s not 6.3 million people (the official number of unemployed Americans). That’s not ~11.6 million people (the larger number, taking into account all those who want a job and don’t have one). Rather, it’s nearly 99.6 million people.
Yet worse than the headline LFPR number itself is that it’s trending in the wrong direction. For example, it was about 67 percent when the Bush Administration began, then steady fell through the 2000s and 2010s, with the Great Recession and Covid restrictions causing notable declines. That decades-long decline can be seen in this chart:8
One reason for that is that the Baby Boomer generation is entering retirement age, more people in the total population are retiring, meaning they’re part of the civilian non-institutional population, but not labor force, something that drives down the LFPR. That can be seen in these charts:9
But it’s not just retirement causing the decline, nor is it that women are focusing on homemaking. According to the Department of Labor data for 2020, even working-age men aren’t working in massive numbers. For example, looking at just men aged 25 to 64, so after nearly all higher education is over and before nearly any retirement begins, massive numbers of men aren’t working. Roughly 13% of men 25-34, 10.3% of men 35-44, 13% of men. 45-54, and 30% of men 55-64 aren’t working. Here’s a chart showing that data:10
In fact, the LFPR only recently returned to where it was before the Great Recession, with some demographics, such as men aged 25 to 54, remaining under their pre-2007 LFPR:11
In fact, nearly the only demographic that seems to be improving its position is college-educated women. As the Federal Reserve of San Francisco noted: “for women with a college degree or more, the LFP trend has gone up, while for women without a college degree, the LFP trend has gone down. For men, on the other hand, a decline in trend LFP stems from declining trends for both the 25–54 and 55 and older groups. This decline for men holds true across all education levels.”12
Why It’s Important
So, why is it important? Why does LFPR matter? Because, when narrowed to those demographics of prime working age, it shows that something is wrong in America’s economic heart. Yes, much of the decline is due to people of retirement age retiring.13 But, as the data shows, that’s not the whole story. What used to be known as the biggest and best economy in the world now has a substantial chunk, about 10-13%, of its prime-working-age men out of work. The Heritage Foundation, describing that problem, notes:14
The labor force participation rate for America’s core workforce of individuals ages 25 through 54 has declined 2.2 percentage points since 2000. That translates into 2.7 million fewer workers, and 1 million of that loss occurred just over the past two years, during the pandemic.
Labor force declines have been most significant—and troubling—among men. Between 2000 and 2022, the labor force participation rate of men ages 25 through 54 dropped 3.4 percentage points, resulting in 2.2 million fewer prime-age working men today.
Similarly, The Hill noted:15
While Americans are more likely to work than Brazilians, Italians, Mexicans and Poles, they are less likely to work than the British, Canadians, Germans, Japanese and Swedes.
Prior to the pandemic, the labor force participation rate of Americans aged 25 to 64 years in 2019 was just below the average for OECD countries. Some 30 countries had a higher rate than America’s level of 78 percent, including Canada with 82 percent, Germany with 84 percent, Japan with 86 percent and Sweden with 89 percent. If the U.S. had Japan’s rate, America’s labor force would increase by 14 million, or twice the number of the country’s unauthorized migrant workers.
…
Another explanation for America’s low labor force participation rates has recently been communicated to Congress. The Federal Reserve chairman said that the educational system and the opioid epidemic, not enhanced unemployment checks or the welfare benefit system, are responsible for low labor force participation.
And why’s that a problem? Turing again to the Heritage Foundation:16
But people working is what drives output and fuels innovation. It’s only through work that basic necessities such as food and housing are available and that innovations such as automobiles and smartphones that make our lives easier and more mobile are possible.
…
Most importantly, Arthur Brooks, a Harvard University professor and former president of the American Enterprise Institute, has explained, earned success that comes through work is the secret to human happiness and dignity.
Brooks points out: “To truly flourish, we need to know that the ways in which we occupy our waking hours are not based on the mere pursuit of pleasure or money or any other superficial goal. We need to know that our endeavors have a deeper purpose.”
This is why, regardless of pay, people who feel productive at their jobs are five times as likely to be satisfied in their jobs as those who don’t feel productive.
For the sake of personal and societal happiness, for the sake of financial well-being, for the sake of America’s dire fiscal situation, and for the sake of preserving the foundation of American society, it’s time for lawmakers to recognize the value and rewards of work in the policies they implement.
Whatever the cause, whether it be young men turning away from a CRT-dominated corporate world and university system, Americans figuring out that they could coast on welfare benefits and stimulus checks instead of working, opioids crushing the lives and spirits of those hooked on them by evil doctors and pharma companies the flooded the countryside with addictive pills,17 or some combination thereof, the LFPR shows that something is wrong with America.
People used to work not just because they had to live off the sweat of their own brow, though they did, but because they wanted to create a better world and knew they could do so with their own hands. Letters from An American Farmer, a collection of letters from a yeoman farmer in the Northeast before the Revolution, shows that. The anonymous author of the letters not only worked hard, but explained that he was doing so to carve out a place in the world that would make it easier for his family to grow and prosper. He was building civilization on the fringes of the forest, and knew what a noble goal it was to build. It wasn’t an ironic or cynical attitude, nor was it the attitude of someone looking only to squeeze an unearned check out of business instead of getting screwed themselves.
Contrasting that attitude to today, it’s not hard to see that the American project has veered far off course. A few people still think like even the simple farmer of those halcyon days and desire to build rather than extract. Elon Musk and Erik Prince come to mind. But otherwise, the attitude is much more one of cynicism, mutual suspicion, and scheming.
Particularly in the wake of the Great Recession, the LFPR seems to show that people were tired of getting screwed and dropped out of the labor force. Paired with Critical Race Theory poisoning universities and workplaces, wages for white men being stagnant since the 70s in terms of purchasing power, and the societal nuclear bomb that is the opioid epidemic, people have little interest in the workplace and less hope for the future, and welfare checks let them drop out.
Returning to the Beginning: Why They Want to Hide It
With all that going on in the background, it’s not hard to see why they want to hide that the actual number of Americans out of work is far, far higher than 3.6%. Determining the exact percentage is difficult due to women staying at home to raise kids, older Americans retiring, and younger Americans staying in school well into their 20s. However, the LFPR for men 35 to 44, or old enough to almost certainly be out of school and young enough not to be able to retire, is likely a conservative estimate of the true rate of joblessness in America. Using it as an estimate, that would mean 10 percent of working-age Americans are out of work and either looking for a job and unable to get one or have given up looking entirely.
Social Security is already on the rocks thanks to there being insufficient workers to pay the benefits,18 and the government’s deficit is already in trillions, that’s bad economic news. What’s worse, from the perspective of a regime seeking legitimacy and finding it increasingly hard to obtain, it shows that Americans are giving up, tuning out, or otherwise walking away in disgust or laziness. Such is not the attitude of an ascendant civilization, and it’s starting to show.
Pages 2, 5 at https://www.bls.gov/news.release/pdf/empsit.pdf