More people are not part of the labor force than has ever been the case since 1977.
Why do we keep blogging about this story in 2012, 2013, 2014, and now? Because the labor force participation rate keeps getting worse! In fact, according to this chart from Zero Hedge, the trend line has been steadily getting worse since the middle of Bush’s first term.
No, not George W. Bush! I’m referring to the one-term presidency of George Herbert Walker Bush (see the lower chart).
In order to find a time when the economy was this bad, as you can see from the upper chart, we have to re-visit the Carter Administration. As we read in Zero Hedge,
In what was an “unambiguously” unpleasant April jobs payrolls report, with a March revision dragging that month’s job gain to the lowest level since June of 2012, the fact that the number of Americans not in the labor force rose once again, this time to 93,194K from 93,175K, with the result being a participation rate of 69.45 or just above the lowest percentage since 1977, will merely catalyze even more upside to the so called “market” which continues to reflect nothing but central bank liquidity, and thus – the accelerating deterioration of the broader economy.
So, just to review: the government’s unemployment numbers only reflect people who are striving to get a job. Others who have either given up or have found that they can live happily without a job (which in most cases would be due to donations from Uncle Sugar) are not counted. So the “economic news” of our 5.4 percent unemployment rate discounts the fact that as few people are in the labor force now as they were in the days of the Jimmy Carter White House.
Is it really not relevant that fewer people are working than more than thirty years ago? How can government spending go up while the number of income-producing taxpayers dwindles?