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Demographic Nightmare: Recession To Recovery In Pictures

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    March 13, 2013

    Please consider a table of various employment statistics for February of each year between 2008 and 2013.

    Abbreviations and Notes
    • LF – Labor Force
    • FT – Full-Time
    • PT- Part-Time
    • SNAP stands for Supplemental Nutrition Assistance Program, widely known as Food Stamps.
    • Change is the difference between since the start of the recession and now, using February 2008 as the approximate start although the official start is a couple months earlier.
    • OC is the change in Obama years (2009 and 2013), February to February.

    All of the columns except “SNAP” are BLS Unadjusted Numbers.

    SNAP data is fiscal year annual data. I used fiscal year 2012 for the 2013 column (and so forth for the other rows).

    All of the numbers are in thousands.

    In The Last 5 Years

    • The Civilian Institutional Population Rose 9.9 Million
    • The Labor Force Rose .9 Million
    • Those Not in the Labor Force Rose 9.8 Million
    • Employment Fell by 2.3 Million
    • Full-Time Employment Fell by 5.3 Million
    • Part-Time Employment Rose by .9 Million
    • Unemployment Rose by 4.5 Million
    • Food Stamp Usage Rose by 20.3 Million

    Non-Workers to Workers

    Let’s consider the ratio of workers to non-workers. Workers are those employed, non-workers are everyone else (the unemployed + those not in the labor force).

    • In the last five years, the number of non-workers rose by 14.3 million while the number of workers fell by 5.3 million.
    • In 2008 there were 144.6 million workers supporting 88.3 million not working.
    • There are now roughly 142.2 million workers supporting 102.6 million not working.

    Ratio of Employed to Not Working

    Reader Tim Wallace put together a nice chart showing the ratio of those employed to those not working.

    click on chart for sharper image

    Demographic Nightmare   

    In the year 2000, there were 1.78 workers for every non-worker. Now there are only 1.39 workers for every non-worker. Meanwhile, food stamp usage is up from 17.2 million to 46.6 million, and medical costs are soaring.

    Wallace comments “the economic burden on the 1.39 is only going to increase unless spending is put under control and the ratio moves back to a higher average number.”

    Things looked OK as long as the ratio of workers to non-workers was rising. It was a demographic “boomer-bubble” illusion fueled by the entry of women taking jobs.

    The ratio of workers to non-workers is now falling, as are real wages. Meanwhile, part-time employment is rising, and costs as well as promises have soared.

    The only realistic way to solve this problem is to cut expenses. That means a cut in medical benefits coupled with a hike in the retirement age.



    Images: Flickr (licence attribution)

    About The Author

    Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.  Visit Sitka Pacific’s Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

    You are currently viewing my global economics blog which typically has commentary every day of the week. I am also a contributing “professor” on Minyanville, a community site focused on economic and financial education.  Every Thursday I do a podcast on HoweStreet and on an ad hoc basis contribute to many other sites.

    When not writing about stocks or the economy I spend a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com.