The “declining” labor force

Readers here are aware that the reason the unemployment rates are relatively low is because the BLS is playing games with the size of the labor force in order to undercount the number of people who are unemployed. The four-percent decline in the Employment-Population Rate, which is less easily gamed than the Unemployment Rate, demonstrates this clearly. So, the Administration and neo-Keynesian apologists have come up with various reasons for why people are “leaving” the labor force in order to justify their statistical shenanigans.

However, this article on Zerohedge makes it clear that people are not leaving the labor force voluntarily. Quite to the contrary, they are clinging harder to their jobs than ever before; the biggest change between 2005 and 2010 was the decline from 36.5 to 25.9 percent employed among the 16-19 age group. In other words, these young adults, who are now 20-23, never found jobs and never formally entered the labor force.

The same pattern is true all the way up through the 45-54 age group, which indicates people losing their jobs due to a lack of seniority, then being unable to find work again. From age 55+, a higher percentage of people were employed than before. People aren’t “leaving the labor force”, they are merely unable to find any work for extended periods of time. They are unemployed by every definition of the term, except for the BLS’s misleading measure.