Taps Coogan – November 16th, 2020
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Today’s 57.4% employment ratio actually represents a fairly sharp recovery from the historic Covid low of just 51.3% back in April.
Prior to Covid, the US employment ratio had been clawing its way back to its pre-Financial Crisis level in the low 60% range. That feat was despite an aging nation with an ever greater portion of the population over the retirement age. All those gains, which never quite brought us back to the pre-Financial Crisis level, have now been lost. The current employment ratio is the lowest since 1983 when female labor participation was considerably worse.
Employment in the US has been trending lower since around 2000. The explanations for this trend include aging demographics, slow long term growth, automatization, offshoring, and disincentives to work (welfare and taxes).
The net result is that, despite the unemployment rate being 6.9%, barely half of the country is working. The unemployment rate only includes people who are actively looking for work.
Can barely half the country support the increasingly expensive cost of living for the other half of the country: the elderly, the children, the students, the disabled, and the uninterested in working? Of course not. That’s why virtually every part of the economy is drowning in debt.
No matter how you cut it, any hope for a brighter economic future has to involve creating a lot of… jobs, jobs, jobs…
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