The Heart of the Problem in Two Charts

  • SumoMe

First off, let me state that I must give all credit for this article to Gary Gordon who wrote an article titled “13 Economic Charts That Wall Street Doesn’t Want You to See”.

I suggest you read his article in its entirety.

But for my own purposes, I just want to highlight two of the charts in Gordon’s article because I think they represent…

The Heart of the Problem

I don’t suppose this will shock anyone but (in my opinion) the heart of any and all economic problems in America today is the fact that there simply not enough people working.  Period. End of story.  OK, at least in my opinion.

Figure 1 displays the Labor Participation Rate which has been trending steadily lower since the economic peak in 1999.1

Figure 1 – U.S. Labor Participation Rate

Gordon said it best in his article – “94 million potential workers are no longer contributing to the growth of the U.S. economy.”  Think about it – if people are not working they are either:

A) Starving

B) Living off of government largesse (i.e., the taxpayers)

Even more disturbing is Figure 2 which shows the “Inactivity Rate for people in the U.S. age 25-54” – in other words, people who are in their prime earning years.2

Figure 2 – Inactivity Rate for people Age 25-54

As Gordon points out correctly  in his article, this tells us that the declining participation rate shown in Figure 1 is NOT simply a matter of Baby Boomers retiring.

When people who should be at the height of their productiveness are “inactive”, well, all kidding aside. that is a profoundly sad thing.

Summary

Until we (“we” being our government and business, ahem, “leaders”) unleash economic forces that lead to greater job creation, the U.S. economy will continue to chug along at the very best.

And I am sure that whenever they get done doing whatever it is they are doing now, they will get right on this…..

Have a nice day.

Jay Kaeppel

One thought on “The Heart of the Problem in Two Charts

  1. Jay, I’ve been thinking these same thoughts for years now. These numbers are every bit as important as the published unemployment rate, but little attention is given to them. Certainly explains the lack of fire in the economy with the unemployment rate “near historic lows”.

    I read and enjoy all your articles. Thanks for being here!

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