“”Where are the jobs”" is a question that is commonly asked at various sites. With the US Government claiming unemployment rate is dropping, it would be reasonable to expect that jobs are becoming more abundant. If you look at the current number of job openings from this Dept of Labor site, there are currently about 4.17 million job openings in various fields. Stay with me in this article and I will show why there is a difference between what we see and what we get.
World Unemployment Rates
The Labor Participation rate of the US is historically around 67% of the labor force over the age of 16. This is a realistic view as the World Bank organization shows the following data from culturally similar countries:
Real US Unemployment Rate
So we can see that using 67% for labor participation is reasonable (actually it should be even higher as there would still be 5% unemployment when 67% are employed) . Now if we look at the US and what our government is trying to tell us, they say our unemployment rate is around 6.7%. However, the raw numbers tell a completely different story. Using the Department of Labor Data, it shows that there are about 4 million job openings with 145 million people currently working. Additionally the US Census Dept shows the US to have 316 Million people (not counting illegals) with 63 Million Kids aged 0 to 16. Now let’s do some simple math to see where we should be, 316-63= 253 million people capable of working. With a labor participation rate of 67%, that would give 169.5 million people looking for work. Now if we include the illegal immigrant number in the US (roughly 12 to 20 million) of 16 million, and consider that 67% of them are also looking for work, that would add about 10.5 million more people looking for work. So on realistic rough numbers, there are about 169.5+10.5 = 180 million people who want to work. This gives a true US unemployment rate of about 19.4%.
Compared to the Great Depression
Bottom line is that there are about 35 million people that are unemployed in the US based on real numbers. Even if everyone was properly trained and the best people were immediately placed in all 4 million available jobs, that would still leave 31 million people out of work with no other jobs to be found. To give an idea of how that compares to the Great Depression, during the worst of if, there were 12.5 million people out of work. Currently there are almost 3 times as many people unemployed during the Great Depression.
Where the US Went Wrong
The problem with the Department of Labor numbers is that they call people so only people with registered phones are part of their survey. However, most severely unemployed people don’t have phones. The final error they made is that they don’t include the high number of illegal immigrants (something that most other countries don’t have to deal with). Mix those issues with the pressure (by different groups) to make it look like the labor market is improving, it is easy to see why they may use deficient methodology.
What Can We Do
Identifying the problem is only half of the issue. The next thing is to look at possible solutions and outcomes. The most popular solutions are as follows:
1. Continue down the current path and repeat history where the civilization falls;
2. Try to pacify the population until there is a large enough military to subdue the populace with excessive firepower;
3. Increase taxes and decrease the disparity of wealth;
4. Provide a large stimulus and training programs to train and start new small business with incentives to make it each step in developing the business.
The first option of continuing down the current path with an increasing disparity of wealth and a growing segment of poor will fail. Historically a large disparity of wealth has disastrous results for the civilization. At the point where people start getting hungry and can’t feed their families, they will do just about anything to take care of their families and themselves. Examples of this are the fall of the Roman Republic (with Julius Caesar and Marcus Crassus), the French Revolution, the fall of the Chinese Empire, the fall of Tsar Russia, the previous Great Depression. In the Great Depression, the civilization changed enough to feed and employ people so there wasn’t a complete collapse. Likewise with Roman Republic turned into an Empire ruled by a dictator. Currently there are wealthy people that fall on both sides of the alternative, from the giving pledge and those donating to elect politicians to increase taxes on the wealthy (themselves) and to maintain a safety net versus those that are for increasing the disparity of wealth by lower taxes and decreased regulations and safety measures for the poor.
The second option would be more difficult for the US as most of the population currently is armed and willing to use it. That will prevent a military dictator from overtly taking over the US. However the US currently has the history of increasingly incarcerating our own people as a means to subdue overt agitators that don’t fit in with accepted society. However with the increase in drone usage and firepower, that may restrict the final conflicts to urban areas where it is more identify unruly citizens.
The third option worked well in the US after WWII when we were in a similar economic situation. The taxes were raised progressively from 20% to 91% on the top income. This allowed different GI benefits, housing, and incentives to put money back into businesses instead of letting it sit idle generating no economy. History has been examined repeatedly by such Nobel laureates such as Joseph Stiglitz who conclude that the increase of taxes on the wealthy has no adverse effects on the economy nor does it reduce growth.
The fourth option was attempted as the economy failed but was implemented poorly. Instead of training and growing new small businesses, it was used to prop up large businesses and banks. The banks then decreased their lending causing an even greater squeeze on new small business. What would have to happen in the future is that existing companies and banks would need to be completely taken completely out of the awards and the new small business would need to deal directly with the government. It could even be setup so they would only get grants as they progressed through startup training and increasing sales.
Where Do We Go Now
Whatever option we take as a nation will show our spirit. Some feel that if we fail to heed the lessons of history then make sure to stock up on supplies and arms because they feel some the poorer choices will need to be contained by a desire to remain free. Others would just like to learn from history and repeat only the good parts. As an American, I will do my part by making informed choices and letting my congressman know where I want the US to go.