What We Know About the 92M Americans Who Aren’t in the Labor Force

http://blogs.wsj.com/economics/2015/10/21/what-we-know-about-the-92-million-americans-who-arent-in-the-labor-force/

by curtis • 11 years ago

67 68 11 years ago

blogs.wsj.com

aschearer3• 11 years ago

TLDR: They're students, retired boomers, or sick middle agers.

linkregister• 11 years ago

Except for the 2 million who "want a job but aren't looking"

aschearer3• 11 years ago

2 million out of 318 doesn't seem especially newsworthy.

fiveoak2• 11 years ago

Yep, although it is slightly worrying that there are 2.6 million people who want a job but aren’t looking. If I had to guess, probably a lot of that is due to a lack of marketable skills.

clavalle• 11 years ago

Or lack of demand for services in their area.

I wonder how they are clustered geographically.

001sky• 11 years ago

This comment is overly reductionist -- 'disabled' is a code word for long-term un-employable.

Just eyball the proportion of working adults in the 50 to 60 year range. It is only ~5x the number of disabled. In other words, that is a huge %--maybe 20%--of potential workers in that age bracket.

Any employment process that disables 20% of its workforce would be normally considered a problem.

But instead we call the un-employable 'diabled', to sweep the data under the rug.

It almost certainly helps keep other people in their jobs, tho (like burecrats and academics).

intopieces2• 11 years ago

'disabled' is a code word for long-term un-employable.

Correct. This is the legacy of the Clinton era 'welfare to work' program: we moved people from welfare to disability.

This will grow as automation takes hold of ever more industries. "Disability" is the U.S.'s first step toward guaranteed minimum income or a negative income tax. We will never have enough jobs for everyone in America, so we need to figure out what we're going to do to keep the economy going.

BadCookie• 11 years ago

Right. I also wonder how many people are only in school because a decent job is out of reach. If you're older and can't find a job, you go on disability. If you're young, you take out loans and go to school. It's a huge generalization, but I think there's some truth to it.

bsder• 11 years ago

You're leaving out the really large "taking care of family" block.

That includes "taking care of elderly" as well as "taking care of kids". Especially the "taking care of elderly" is putting a very large drain on resources that is simply going to get worse and worse as the boomers age.

larrymyers• 11 years ago

It's especially difficult with how non-existent the possibility of "professional but part-time" is. I know my wife would love to begin putting her engineering degree back to use 15-20 hours a week, but the only real option is to go full time and enroll our daughter in full time daycare, which we really would prefer not to do.

choward• 11 years ago

I'm most surprised about the all the retired 16-20 year olds.

palehose2• 11 years ago

What about entrepreneurs starting a business that is not yet profitable? Is that something the government doesn't care about or are the numbers just too small?

nostromo2• 11 years ago

They're counted as employed.

palehose2• 11 years ago

Not if there is no investment and no one is getting paid anything yet.

sjg007• 11 years ago

18-22 year olds looking for a job would be more interesting. This measures post high school and the "in college" fraction.

_delirium2• 11 years ago

Yeah, I think these brackets could use reworking for present-day interpretability. Working-age population traditionally starts at 16 in U.S. government statistics, since that's the traditional age where both mandatory schooling, and most child-labor-law restrictions ended. However the first part of that is becoming less true: currently only 30% of states still allow you to legally leave school at age 16. Another 20% have extended mandatory schooling to age 17, and 50% to age 18.

discardorama2• 11 years ago

I have a neighbor who used to work as a landscaper. The money was decent (in SF); his specialty was masonry. Then a couple of years ago, he decided to drop out. Claimed he had MS and started getting SSDI checks of about $2K/month (I think). After he dropped out, I've seen him lift 100lb stones; frequently, he'll drive down to Arizona for fishing trips with buddies; and recently, he drove cross-country to Georgia for a HS reunion, and made it from Albuquerque to SF in 1 day. All this, despite having MS. I feel, if he can do all these activities, he can damn well work; but he's been able to fool the system for the last 3-4 years.

If you look at the SSDI stats: https://www.ssa.gov/oact/STATS/dibStat.html it is interesting to see that when the Financial Crisis happened, the number of applicants jumped drastically; a 34% increase from 2007 to 2009. And as the economy has picked up recently, the number of applications has gone down; a 15% drop from 2010 to 2014.

While I do support the idea of a "safety net", I don't like the idea of people dipping into SSDI when they don't feel like working (or can't get work).

Added later: (1330PST): A lot of people are saying that he could just be having a good day or two. Maybe; but he has enough good days (when I see him), there's no reason that he would not work on his "good days". Secondly: my last conversation with him (3-4 weeks ago) was about how he could go about getting a cash-only gig, and he wanted my opinion (me being a tech guy). I recommended Postmates/TaskRabbit, but he shied away from those, opting for cash gigs from Craigslist. Maybe the 1099 would have ratted him out? I dunno.

toomuchtodo3• 11 years ago

This is infuriating.

My mother is 58. Her lower spinal column was collapsed, and she's had it reconstructed using titanium plates and screws during a 6 hour surgery. She has been denied for disability by the Social Security Administration twice, and currently has to wait ~500 days for her next appeal (https://www.ssa.gov/appeals/DataSets/01_NetStat_Report.html) in front of an panel of judges (this backlog is caused by Congress providing insufficient funding to process said backlog).

How the hell are people who don't need disability getting approved, and the people who don't need it are stuck in purgatory?

derekp7• 11 years ago

Same here -- my GF has Fibromyalgia. She was working up till a couple years ago, and now can't drive due to the pain meds. After 3 rejections, she's finally getting a court date at the end of the year.

From what I gather, since there has been a larger number of people filing for disability, they are automatically rejecting applicants several times hoping that they will get a job (if they really don't need the disability). Then, if you make it to the court date, that itself is evidence that you are disabled enough.

Now I don't agree with this, but apparently this is the way they are running the program now.

itsybitsycoder2• 11 years ago

He doesn't know whether his neighbor needs disability or not, he's just guessing. MS symptoms are really variable. The fact that he has a few good days doesn't mean he can hold down a steady job.

tsotha2• 11 years ago

From what I can tell you'll get disability if you keep bothering them long enough. I know guys who are on disability for lower back pain with no physical evidence, i.e. x-rays are normal. They all got turned down a few times at first, but I get the impression if you keep at it long enough they give you benefits just to get rid of you.

icelancer• 11 years ago

How the hell are people who don't need disability getting approved, and the people who don't need it are stuck in purgatory?

Because bureaucracy basically guarantees this exact injustice will occur.

dcosson• 11 years ago

if he can do all these activities, he can damn well work

Yeah, screw him for living life to the fullest while he still can, instead of continuing heavy physical labor every day until he's in a wheelchair.

In all seriousness, it's not like disease is completely black & white and there's always an obvious day up until which you can easily work. Just the mental & emotional drain of coping with something like this must make it incredibly difficult to get up every day and get excited about working.

If our economy can't provide a safety net for people in tough in-between situations like this, then let's make our systems more efficient rather than force a bunch of people to do something they don't feel up for just because it's a job.

XorNot• 11 years ago

Also that humans are terrible statisticians and tend to only record notable events, not all events. The guy could easily spend 80+% of his life unable to do those things, and you'd still say "pull his disability" based on the few good days he had.

itsybitsycoder2• 11 years ago

What do you expect people to do when they can't find work and don't have access to any other safety net? Is it really worse for someone to lie in order to keep food on the table and a roof over their head, than for us (as a society) to let people starve or go homeless?

The fact that the SSDI stats jumped during the financial crisis shows that people aren't applying just because they're lazy and don't want to work. They're applying because the work isn't there, otherwise the numbers would have already been just as high before the crisis.

You also have to consider that a lot of these people may be legitimately "too disabled to work" during a job shortage but be fine when there is more demand for workers. When employers are desperate for workers, they're willing to make more accommodations than they would when there are hundreds of applicants per opening. MS is a great example of this because its symptoms are so variable from day to day. My mom has had MS since before I was born and she's been able to find part-time work when the economy is doing good because some employers are willing to accept that she needs to work shorter shifts, take longer breaks and will call in sick more often. During harder times she's outcompeted by applicants who don't have these issues. It's very possible your neighbor is only capable of lifting 100lb stones 2 or 3 days of the week. Hard to find stable work that way.

Shivetya• 11 years ago

the most common disability out there is obesity, at least from appearances sake. More than one coworker has gone out for this which is surprising to me because until they did you would never have expected it. Yeah they were large but to get out on disability and stay there? Really?

Of course patient survey's don't help this at all. I do know my doctor will rarely if ever raise the notion that a patient's weight is the cause of their problems, from bad back, weak joints, pain in walking, or diabetes. Why? Surveys. You get whacked more than a few times and suddenly its not worth the frustration. Sadly there are movements that are pushing for acceptance. I wonder how many other shake their head in annoyance at all the obese who have stickers and park up front at the store? Its like ready content for people of wal mart.

As for the SSDI, there are so many cases of fraud and its not uncommon to read about some disability mill getting caught and having to pay out. However you won't see many of those receiving their SSDI losing it. Its even worse when just you can make believe a mental disability and get it. There was that famous case from 2011 where a guy was claiming disability, wearing diapers, having nurses attend, and more.

nickff2• 11 years ago

This has been extensvely studied, and it has been found that many people realized they could get much more money in the long term by claiming disability instead of simply claiming various unemployment benefits.[1] The number of people on the disability rolls went up substantially during the great recession when the number of unemployed or marginally employed people increased drastically, and many of them decided to claim disability rather than trying to go out and look for new jobs.

What is particularly distressing about this phenomenon is that the people on disability are discouraged from looking from insecure jobs, because disability benefits are a guaranteed long term income stream which is forfeit in perpetuity upon employment. It is clear that many of the people receiving these government benefits understand the system quite well, as a substantial portion of them are working off the books, to get extra income while avoiding loss of long term benefits.

[1] http://economics.mit.edu/files/7388

paulcole• 11 years ago

You're taking anecdata from anecdata.

"I know one guy who is potentially abusing disability. I have seen him on ones of occasions do something that makes me think he should be working."

tsotha2• 11 years ago

While what you're saying is true, there's an amazing jump in the number of disabled people that coincides with the onset of the recession in 2008.

healthanomthrow• 11 years ago

I'd caution you against making easy assumptions about other people's health. MS is an episodic disease, which means that there are times when patients are near normal, and times when they're entirely incapacitated. Have you considered that you might have seen him to these things when he's not experiencing an episode? Not to mention that disability is fairly strict and that MS would be extremely hard to fake (pretty sure that MS diagnosis is usual made on the basis on MRI imaging).

Also, to take a very personal example, I've also got a neurological condition (not MS) that is fairly episodic. I'm fortunate that I'm have got a desk job as a software developer and so I haven't had to seek disability (despite being told by my physician he'd support an application). If I had to work going physical labor, I wouldn't have a choice but to apply for disability, since when my condition flares up I'm fairly immobile. Even walking short distances is difficult. There's simply no way I could hold down a 5 day/week physical labor job.

That said, when things are going well, I can be fairly active. Today I was out working on my deck. I take my kids to the zoo and walk around the entire park. If I had had to take disability, would people say the same things of me?

Mz3• 11 years ago

I am medically handicapped. I do not qualify for disability for basically bureaucratic reasons. But I do have some income without working and I do freelance work and had food stamps for a time.

Being able to quit my corporate job has allowed me to get healthier and a lot of people would be surprised to find I am handicapped. I mostly walk everywhere and can walk for hours at a time. I also have days when I fall down because I am extremely neurologically impaired, when I have blinding pain accompanied by profuse vomiting and so on.

Being able to quit working can make a handicapped person genuinely more functional. But that doesn't mean they are employable and it doesn't mean the performance you see and judge as evidence of being "able bodied" really adds up to employability.

In other words, he can lift 100 lb stones because he does it when he damn well feels like it, on a good day, at a time of his choosing, under circumstances of his arranging -- none of which applies to typical working conditions.

lfowles• 11 years ago

Do you suspect you'd be seeing him on bad days? Personally, I'd be making like a recluse.

SovietDissident• 11 years ago

The question is: why have disability claims skyrocketed at least since the 90s? Are Americans that much more disabled (than people of the Depression, WWII and Vietnam generations, and beyond)? It strikes me as being highly implausible. Based on some of the data presented here and elsewhere, it seems like it's become another welfare program for many people, with some "deserving" individuals in between. Some people, when not forced to work for their survival, will eschew it. Others see it as free money, and just work for cash on the side.

To the moral question of the safety net: is it just for one to have earned X dollars (and spent Y amount of one's life) working at a job, only to have the fruits of one's labor forcefully taken away to fund his neighbor's welfare/housing/food/schooling/etc.? I would argue no.[0] If someone is disabled or destitute, he can appeal to the charity of his family members, fellow human beings, or philanthropy to help him out. There are plenty of people (many on these boards, I imagine) who have excess resources and would surely help a starving man in the street or an orphan.

Indeed, voluntary aid would fix the issue of worthiness which you raise: if you are worthy of help, you will be judged worthy to receive it. (Charities and mutual aid societies have existed since at least the 19th century, and have proliferated even more-widely since.[1]) If not, time to start providing value to others (i.e., labor) and receiving money in exchange. There ain't no such thing as a free lunch.

[0] http://philo.abhinav.ac.in/Objectivism/Ayn%20Rand%20-%20The%...

[1] http://www.forbes.com/sites/objectivist/2011/11/18/america-b...

6stringmerc2• 11 years ago

Huh, I've seen consistent material over at Zero Hedge[1] indicating that since 2007 the cohort that has made the most job gains is over the age of 55.

"...while the elderly workers in the US have risen by a whopping 7.4 million since the start of the Depression in December 2007, workers aged 25-54 are down 4 million!"

As shown in this chart:

http://www.zerohedge.com/sites/default/files/images/user5/im...

If there's a person here with a good handle on how the WSJ article and the noted Zero Hedge article relate to one another, I'd be very interested in your perspective.

[1] Article source, August 2015. http://www.zerohedge.com/news/2015-08-07/prime-aged-workers-...

michaelZejoop5• 11 years ago

What is the nature and quality of the jobs these post 55 people have taken. Do the jobs they land in compare favorably with the jobs they were displaced from? Did they go from professional jobs to service sector jobs? This distinction is important. As a forced-into-early-retirement, former aerospace engineer, I am curious, and I will check your links later.

As for my future, I am trying to create my own asset/company and I don't see myself reentering the workforce as an hourly wage earner again.

6stringmerc2• 11 years ago

From the data I've seen, yes, they have gone from professional jobs to service sector jobs - or, at least the data indicates that those are the type of jobs that are being filled during recent memory. It's been a hunch of mine that the displaced older workforce's jobs simply don't exist anymore (layoffs due to technology, better for investors) and the service sector jobs would normally be for the younger population as they 'move up' through the ranks...but they can't get in...those spots are taken by the over 55 group. I think that they almost have to work, e.g. no retirement savings, unwilling to move to rural/low-income areas where their SSI might be sustainable. Vexing.

cryoshon2• 11 years ago

This article doesn't really delve into the percentage of the population that "doesn't look, but still wants a job". This population is the most important one as far as generational wealth and health is concerned; retiring and disabled boomers are to be expected.

Part of this is an intentional misrepresentation of the employment numbers. In order to be counted as "unemployed" you must first have had stable "employment". Thus, people just out of high school or college that are unable to find their first job (which is often extremely hard to come by) are not counted as unemployed, despite being so. The other problem is that after unemployment benefits expire, people aren't counted as unemployed anymore, so the unemployment stat goes down, but the percentage not in the labor force goes up.

Employment indicators U3/U6 are remarkably poor for depicting gainful employment in the wake of economic depressions; they're meant to measure unemployment that is expected to be transient. Super long-term unemployment, difficulty finding a first job, and underemployment are not adequately measured, though the part-time employment stat is somewhat taken into account.

TallGuyShort• 11 years ago

I think the whole point of the article was that we need to know more about that percentage of the population that "doesn't look, but still wants a job", because dismissive explanations are insufficient.

Does anyone on HN have suggestions of possible explanations for some of that percentage? I don't understand it. Is it people who wanted a job, but gave up looking? Other situations that would fall into this category other than simply "lazy"?

Mz3• 11 years ago

Sometimes, people would rather see themselves as lazy or free spirits than admit to disability. I was acquainted for a time with a homeless man who seemed able bodied but had a mental health issue. He quit his job and walked away from his worldly possessions to get off the zombifying drugs required to make him employable. I have a different disability but made similar choices, so I am sympathetic. But he was very resistant to admitting that he was too handicapped to hold down a job. I knew him a while before that became clear to me. And it isn't anything you would infer at first glance. If you saw him, he looked tall and strong and able bodied, he sounds intelligent and is intelligent and the degree to which he is not mentally sound is just not obvious to casual inspection.

I have two adult sons who have never had jobs. They also look hail and hardy. They both have some issues. We are still trying to work out how they can make money in spite of being basically unemployable.

I suspect this happens more than is recognized. My handicap was not identified until age 35. I got called "lazy" a lot until I had a diagnosis. I am a woman and was fortunate to be able to hide out for many years behind the title of full time wife and mom.

michaelZejoop5• 11 years ago

There is a portion of the spectrum that seems like it is in the "wants a job, but is not looking" category that is not properly represented. I am in sub-category of "wants a gainful future (after being laid off - essentially forced into early retirement - from a long aerospace career) but is not looking for a job (either in the sector I left, or in the service sector). Aerospace is notorious for ageism, and I have no future there. I will not look for a job as a barrista or a clerk at Home Depot, so, no, I am not looking.

I am however trying to create my own future as an entrepreneur and build my own company. This effort being bootstrapped, on my own dime, using funds that should have been reserved for retirement. There is a lot of solid engineering talent and experience that is laying dormant - I am trying to counter that by building my own asset/company.

omarchowdhury2• 11 years ago

Aerospace is ageist towards the older people? That's interesting, I'd think that experience would be the most important factor in that space.

e40• 11 years ago

It's because that industry uses a lot of old (software) technology and older folks tend to know it best.

michaelZejoop5• 11 years ago

Once you top out the salary range, and are close to 55 (the earliest age for reduced retirement benefits) they look for ways to shed you. It happened to me, and many other colleagues. I have worked on a lot of great projects such as B2 Bomber, Space Shuttle, UAV Global Hawk and many satellite programs. That does not matter; once you hit the age/wage criteria, you better have great connections or you could easily see yourself filing for unemployment.

oconnore2• 11 years ago

But the "in the labor force" category includes people who are forced to work part time so they don't collect benefits, get bumped from job to job, have unreliable hours, make less than the cost of living, etc.

The graph should be split:

- Has a reliable full time job with benefits

- Has a minimum wage job, or is a part time employee/contractor making less than $20-30k a year.

_delirium2• 11 years ago

It's not shown here, but the Bureau of Labor Statistics does further break down workers into full-time, voluntarily part-time, and involuntarily part-time [1]. Numbers for part-time workers below are for September 2015.

    Part-time for economic reasons (6 million)
        Slack work or business conditions (3.6 million)
        Could only find part-time work (2.1 million)
        Other (0.3 million)
    Part-time for noneconomic reasons (20 million)

[1] http://www.bls.gov/news.release/empsit.t08.htm

oconnore2• 11 years ago

Thanks, so depending on how you count unincorporated, self employed workers, you get between 3.5% [1] and 9% [2] of the labor force underemployed (not looking at salary). I suspect there are more Uber drivers than successful independent consultants, but we don't have data about that.

That's better than I expected.

[1]: (6036) / (2357 + 146464 + 19656) [2]: (6036 + 8357 + 820) / (2357 + 146464 + 19656)

nsheth17• 11 years ago

The impact of this is going to become so obvious when interest rates start going up.

Let me explain. Ultimately, how much money the workforce is making matters to consumer spending. People may be ok not having a job, because they have some way to stay at their standard of living. But unless a bunch of them are sitting on family trusts, it also means they don't have a growing amount of money to spend.

Yet consumer spending has been growing steadily for the last 5 years. How can that be? The likely scenario is really cheap debt. The kind that disappears when interet rates aren't basically zero anymore.

We've shoved a lot of stuff under the "free money" carpet. When the Fed bumps up the interest rates, all those spiders are going to come out to play.

edc117• 11 years ago

Just curious, what do you mean by 'free money'? Most loans I've seen over the last few years vary from anywhere between 2.5%+ (houses) to 17% (credit cards). I don't think anyone would think of those as 'free'.

I would think the interest rates going up would actually encourage people to save more.

What We Know About the 92M Americans Who Aren’t in the Labor Force

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