The Beginning Of The End
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The Employment Rate In The United States Is Lower Than It Was During The Last Recession

Did you know that a smaller percentage of Americans are working today than when the last recession supposedly ended?  But you won’t hear about this on the mainstream news.  Instead, the mainstream media obsesses over the highly politicized and highly manipulated “unemployment rate”.  The media is buzzing about how “163,000 new jobs” were added in July but the unemployment rate went up to “8.254%“.  Sadly, those numbers are quite misleading.  According to the Bureau of Labor Statistics, in June 142,415,000 people had jobs in the United States. In July, that number declined to 142,220,000. That means that 195,000 fewer Americans were working in July than in June. But somehow that works out to “163,000 new jobs” in July.  I am not exactly sure how they get that math to add up.  Perhaps someone out there can explain it to me.  Personally, I find that the “employment rate” gives a much clearer picture of what is actually going on in the economy.  The employment to population ratio is a measure of the percentage of working age Americans that actually have jobs.  When it goes up that is good.  When it goes down, that is bad.  In July, the employment to population ratio dropped from 58.6 percent to 58.4 percent.  Overall, the percentage of working age Americans that have jobs has now been under 59 percent for 35 months in a row.

The following is a chart of the employment to population ratio in the United States over the past 10 years….

The gray shaded bar in the chart represents the last recession as defined by the Federal Reserve.  As you can see, the percentage of working age Americans with a job dropped sharply from nearly 63 percent at the start of 2008 to a little above 59 percent when the recession ended.

But the “employment rate” kept on dropping even further.

It finally bottomed out at 58.2 percent in December of 2009.

Since that time, it has stayed very steady.  It has not fallen below 58 percent and it has not risen back above 59 percent.

This is very odd, because after ever other recession since World War II this number has always bounced back strongly.

But this has not happened this time.

In essence, it is starting to look like 4 percent of the working age population of the United States has been removed from the workforce permanently.

The good news in all of this is that things have at least not been getting any worse over the last couple of years.  Even though things have been bad, at least we have had a period of relative stability.

The bad news is that the employment rate has not rebounded despite unprecedented borrowing and spending by the federal government and despite reckless money printing by the Federal Reserve.

Considering how desperately the federal government and the Federal Reserve have been trying to stimulate the economy, I truly did expect to see the employment rate bounce back at least a little bit by now.

Unfortunately it has not and now the U.S. economy is rapidly heading for another recession.

But Barack Obama is going to prance around over the next few days and talk about how wonderful it is that the economy created “163,000 new jobs” in July.

What he isn’t going to talk about are the millions of Americans that have been unemployed for so long that they don’t even “count” in the official unemployment numbers anymore.

But those people actually exist and they are really hurting.  Many of them are starting to lose their unemployment benefits and they really do not know what they are going to do.  The following is from a recent USA Today article….

Since abruptly losing her $312 weekly unemployment check in June, Laurie Cullinan has depleted her savings, sought food from the Salvation Army and lit candles to save electricity.

If she can’t find a job this month, the Royal Oak, Mich., resident worries she’ll be evicted from her apartment, an unthinkable prospect for the 52-year-old, who enjoyed a solidly middle-class lifestyle until she lost her office-manager job two years ago.

“What am I going to do if I’m homeless?” says Cullinan, who collected unemployment for 1½ years. “My mind won’t let me comprehend that.”

Could you imagine having to face that?

What would you do if you were about to be tossed out on to the street?

When you add up all of the working age Americans without a job in the United States today, it comes to more than 100 million.

Some people have accused me of lying about that figure, but it is actually true.

There are more than 100 million working age Americans that are not employed right now.

And even if you do have a job that does not mean that you are doing well.  As I wrote about yesterday, only 24.6 percent of all jobs in the United States today are good jobs.

The cost of living continues to rise much faster than wages are.  Many families are having a really hard time just paying for the basics.  The inflated standard of living that we have all enjoyed for so long is starting to disappear.

An increasing number of young people are living with their parents well past the age of 18 because there are not enough good jobs and it is just so hard to make it in this economy.  If you can believe it, 24 percent of all Americans in the 20 to 34 year old age bracket are living at home with their parents at this point.

But we will be seeing a lot more of this as the economy gets even worse.  “Multi-generational households” will become very common, and that is not necessarily a bad thing.  Perhaps this will give some families a chance to do some bonding.

Meanwhile, many of our once great cities continue to rot and decay at a staggering pace.  Today, I saw one report that discussed how the city of Detroit has become a dumping ground for dead bodies.

How sad is that?

Detroit was once the envy of the world and now it is a place where murder victims are dumped.

These are all indications of just how far we have fallen.

But things are going to get a lot worse, so we should actually be thankful for the period of relative stability that we are enjoying right now.

The long-term economic collapse that we are experiencing right now will soon accelerate.  Eventually even the highly manipulated official “unemployment rate” will soar well up into the double digits.

When it does, the anger and frustration that is boiling under the surface in this country is going to explode.

Let us hope for the best, but let us also prepare for the worst.

There Are 100 Million Working Age Americans That Do Not Have Jobs ***UPDATED***

The unemployment crisis in America is much worse than you are being told.  Did you know that there are 100 million working age Americans that do not get up in the morning and go to work?  No wonder why it seems like there are so many people that do not have jobs!  According to the federal government, there are 12.6 million working age Americans that are considered to be “officially” unemployed, but there are another 87.8 million working age Americans that are not working either.  The federal government considers those Americans to be “not in the labor force” so they are not included in the unemployment rate.  In fact, this is one of the key ways that the government manipulates the unemployment numbers.  The Obama administration would have us believe that the unemployment rate is going down and that that since the start of the last recession about as many Americans have left the labor force as we saw during the entire decades of the 1980s and 1990s combined.  Of course that is a bunch of nonsense, but that is what the Obama administration would have us believe.  The truth is that the percentage of working age Americans that are employed is just about the same right now as it was two years ago.  It was incredibly difficult to get a job back then and it is incredibly difficult to get a job right now.  So don’t believe the hype that things are getting much better.  If you still do have a good job, you might want to hold on to it tightly, because there is not much hope that things are going to improve significantly any time soon.

The first chart that I have posted below shows the total number of “officially” unemployed workers in America.  According to the Federal Reserve, that number is currently 12,673,000.  This chart makes it look like the employment picture in America is getting significantly better….

But if you dig deeper into the numbers you quickly see that this is not true.  A lot of those workers that were formerly classified as “unemployed” have now been moved into the “not in labor force” category.  Since the start of the last recession, the number of Americans not in the labor force has risen by more than 8 million according to the Obama administration.  The total number of working age Americans not in the labor force now stands at 87,897,000….

So when you add 12,673,000 and 87,897,000, you get a total of 100,570,000 working age Americans that do not have jobs.

Yes, there are certainly millions upon millions of working age Americans that do not have jobs and that do not want jobs.

But you have to be delusional to believe that there are nearly 88 million working age Americans that do not have jobs and that do not want jobs.

The Obama administration tells us that the labor force participation rate is now the lowest it has been since 1984.  But back then, a very large percentage of women were staying home and raising families.  The percentage of stay at home mothers has declined steadily since then.

So the truth is that the employment statistics that we are being fed are not portraying an accurate picture of what is really going on.

As a CNN article recently explained, there are millions of Americans that say that they would like to have a job even though they have not been “actively” looking for one in the past four weeks.  If those people were included in the unemployment rate, it would immediately shoot up to around 11 percent….

About six million people claim they want a job, even though they haven’t looked for one in the last four weeks. If they were to all start applying for work again, the unemployment rate would suddenly shoot up above 11%.

If you want a much more accurate picture of what is really happening to the employment situation in America, the key is to look at the employment to population ratio.  As I have written about previously, the percentage of working age Americans that have jobs is not increasing.

Let’s take a look at the employment to population ratio for the last six years for the month of March….

March 2007: 63.3%

March 2008: 62.7%

March 2009: 59.9%

March 2010: 58.5%

March 2011: 58.5%

March 2012: 58.5%

The percentage of the working age population that had jobs fell rapidly during the recession and it has stayed very low since then.

When Barack Obama tells you that “America is going back to work” he is lying to you.

The cold, hard reality of the matter is that there are millions of hard working Americans that have been sitting at home for years hoping that a new job will come along.

Back in 2007, approximately 10 percent of all unemployed Americans had been out of work for one year or longer.

Today, that figure is above 30 percent.

The average duration of unemployment in the United States today is about three times as long as it was back in the year 2000.

And according to a recent Wall Street Journal article, the number of announced job cuts is actually rising again….

Also, announced jobs cuts rose 7.1% in April, according to Challenger, Gray & Christmas, to 40,599 — and up 11.2% from last April — another bit of evidence that the jobs market isn’t doing well.

Economic conditions in the United States have been steadily getting worse for quite a while, but that is not the only reason for our employment problems.

There are two other trends that I want to briefly mention.

1) A lot of jobs that used to be very labor intensive are now being replaced by technology.  Thanks to robotics, automation and computers, a lot of big companies simply do not need as many workers these days.  Those are jobs that are never going to come back.

2) As labor has become a global commodity, millions upon millions of U.S. jobs have been sent overseas.  Today, you are not just competing for a job with your neighbors.  You are also competing with workers on the other side of the globe.  Unfortunately, it is legal to pay slave labor wages in many of those countries.  By sending our jobs out of the country, big corporations can also avoid a whole host of rules, regulations, taxes and benefit payments that they would be facing if they hired American workers.

So U.S. workers are at a massive competitive disadvantage.  Why should a big corporation pay 10 or 20 times more for an American worker when they can pad their profits by exploiting cheap foreign labor?

The sad truth is that the value that the marketplace puts on the labor of the average American worker is continually decreasing.

This is making it much more difficult to find a job and it is keeping wages down.

In the old days, pretty much any man that was a hard worker and that really wanted a good job could go out and get one.

But now all of that has changed.  Back in 1950, more than 80 percent of all men in the United States had jobs.  Today, less than 65 percent of all men in the United States have jobs.

And sadly, the vast majority of the jobs that are being lost are good jobs.  As I wrote about the other day, 95 percent of the jobs lost during the recession were middle class jobs.

So how are middle class families making it these days?

Many of them are going into tremendous amounts of debt.  As a recent CNN article detailed, the average debt load being carried by those of us in the bottom 95 percent of all income earners has risen dramatically over the past several decades….

In 1983, the bottom 95% had 62 cents of debt for every dollar they earned, according to research by two International Monetary Fund economists. But by 2007, the ratio had soared to $1.48 of debt for every $1 in earnings.

Unfortunately, many American families are absolutely maxed out at this point.  According to one recent survey, approximately one-third of all Americans are currently paying their bills late.

If your goal is to live a middle class lifestyle, you need to realize that the entire way that the game is being played is changing.

In the old days, you could start out with a company as a young person and stay with that company until you retired.  If you worked hard and you were loyal, there was a really good chance that the company would recognize that and be loyal to you too.

These days, most companies are absolutely heartless when it comes to their workers.  The good job that you have today could be gone tomorrow.  Workers are increasingly being viewed as “liabilities”, and there is a good chance that the moment you become “expendable” to your company you will be kicked out on the street.

That is one reason why I am encouraging people to consider starting their own businesses.  If you work for someone else, your security can be taken away from you at any moment.  But if you work for yourself, you aren’t going to get fired.

Unfortunately, tough economic times are coming and things are not going to be easy no matter what road you take.  It will be imperative to work harder than ever, to stay flexible, and to never, ever give up.

***UPDATE***

Since the monthly jobs numbers were released on Friday I thought I would update this article to reflect the latest figures.

The federal government has announced that the unemployment rate has declined to 8.1 percent.

That certainly sounds like good news.

But knowing better, I immediately went and checked how the employment to population ratio had changed.

Well, it turns out that the employment to population ratio has fallen once again.

That means that a smaller percentage of working age Americans had jobs in April than in March.

The following are the figures for the past three months….

February 2012: 58.6%

March 2012: 58.5%

April 2012: 58.4%

If the percentage of people that have jobs is going down, then how can they claim that things are getting better?

The following are the two Federal Reserve charts posted above after they have been updated with the new numbers.  These charts are very revealing.

1) There are now 12,500,000 workers that are “officially” considered to be unemployed….

2) There are now 88,419,000 Americans that are considered to be “not in the labor force”.  Please note that this number rose by 522,000 in just a single month!….

Okay, so now let’s do the same math that we did before.

12,500,000 unemployed workers plus 88,419,000 Americans that are “not in the labor force” equals 100,919,000 working age Americans that do not have jobs.

That number just continues to climb at a very rapid pace.

When is the mainstream media going to start telling us the truth?

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