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Report: 27 Million Adults in America Not Working

(photo: Old Sarge via Flickr)

The best measure of the real economy over the next couple years is probably going to be the employment-population ratio. So many long-term unemployed have dropped out of the labor force that the topline unemployment rate is significantly undercounting reality. But the EPOP, as it’s called, gives you the specific number of employed Americans relative to the total population. The Bureau of Labor Statistics put the EPOP for March at 58.5%, basically unchanged and actually slightly down from a year ago. USA Today puts that number even lower:

The share of the population that is working fell to its lowest level last year since women started entering the workforce in large numbers three decades ago, a USA TODAY analysis finds.

Only 45.4% of Americans had jobs in 2010, the lowest rate since 1983 and down from a peak of 49.3% in 2000. Last year, just 66.8% of men had jobs, the lowest on record.

The bad economy, an aging population and a plateau in women working are contributing to changes that pose serious challenges for financing the nation’s social programs.

There are a couple ways to deal with the financing issue. First, a more liberal immigration policy would add workers to the economy who would help balance the EPOP and pay into the social insurance programs. Alternatively you could change the tax structure, and lift the Social Security payroll tax cap, for example.

But the bad economy only makes this worse. There’s a ton of idle capacity in the economy, a demand shortfall that forces millions of potentially productive workers to the sidelines. USAT estimates 27 MILLION non-working adults; that’s inexcusable. And they will not be helped by contractionary fiscal policy that lowers demand even further.

Just to add another data point: weekly unemployment claims went back above 400,000 last week. That figure is highly sensitive, but it’s not good news.

This ratio of employed to unemployed, ultimately, is the problem in America. It’s why people feel like things are getting worse, in record numbers. Idleness is the great ill of society today. We’re not doing much to combat it, just hoping that things will slowly get better while moving on to other issues. But all the issues are connected. You can’t have a federal budget in balance, to the extent that you’d even want one, with 27 million adults not working.

CommunityThe Bullpen

Report: 27 Million Adults in America Not Working

The best measure of the real economy over the next couple years is probably going to be the employment-population ratio. So many long-term unemployed have dropped out of the labor force that the topline unemployment rate is significantly undercounting reality. But the EPOP, as it’s called, gives you the specific number of employed Americans relative to the total population. The Bureau of Labor Statistics put the EPOP for March at 58.5%, basically unchanged and actually slightly down from a year ago. USA Today puts that number even lower:

The share of the population that is working fell to its lowest level last year since women started entering the workforce in large numbers three decades ago, a USA TODAY analysis finds.

Only 45.4% of Americans had jobs in 2010, the lowest rate since 1983 and down from a peak of 49.3% in 2000. Last year, just 66.8% of men had jobs, the lowest on record.

The bad economy, an aging population and a plateau in women working are contributing to changes that pose serious challenges for financing the nation’s social programs.

There are a couple ways to deal with the financing issue. First, a more liberal immigration policy would add workers to the economy who would help balance the EPOP and pay into the social insurance programs. Alternatively you could change the tax structure, and lift the Social Security payroll tax cap, for example.

But the bad economy only makes this worse. There’s a ton of idle capacity in the economy, a demand shortfall that forces millions of potentially productive workers to the sidelines. USAT estimates 27 MILLION non-working adults; that’s inexcusable. And they will not be helped by contractionary fiscal policy that lowers demand even further.

Just to add another data point: weekly unemployment claims went back above 400,000 last week. That figure is highly sensitive, but it’s not good news.

This ratio of employed to unemployed, ultimately, is the problem in America. It’s why people feel like things are getting worse, in record numbers. Idleness is the great ill of society today. We’re not doing much to combat it, just hoping that things will slowly get better while moving on to other issues. But all the issues are connected. You can’t have a federal budget in balance, to the extent that you’d even want one, with 27 million adults not working.

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David Dayen

David Dayen