Wednesday, June 26, 2013

Twelve million new takers on the books

I took a look at St. Louis Fed data today, both the civilian employment to population ratio and the working age civilian population.  I then combined the data into a chart of deltas with their initial values pegged to Dec-2007.  The result is the following:

What does this chart mean?  It means that whilethere are about 2.5 million fewer people employed than in 2007, but that we've also got 12.5 million more people of working age - that is, 15 million more unemployed today than we did five and a half years ago.  This is due to an increasing population that has completely given up trying to find work.  It means, that though the recession destroyed something like eight million jobs and the post recession has created around five million jobs, we've added more than twelve million non-working civilians in the same time. 

That's staggering - utterly and completely staggering.  That means - follow me here - that means that not a single working age person added to our population since 2007 is working.  We've added twelve million takers but not one new producer.  Not one.

Further corroboration from the BLS: 11 million new civilians "not in the labor force."

The point of this exercise is to find out where the government is shuffling the unemployed in order to make it look like the unemployment rate is dropping.  Well there they are.

The Employment to Population ratio, courtesy of the St. Louis FED.  It doesn't get much more damning than this.  The new normal is 5% fewer people working than 6 years ago.  Not one new producer indeed.

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