Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


Fewer Americans are working than 20 Years Ago

The unemployment rate is far higher than the government and the media want to admit. Tens of millions of Americans are permanently out of work and making no effort to try and find a job.

That’s the bleak and very depressing picture painted by economist and demographer Nicholas N. Eberstadt in a very disturbing piece in Commentary magazine. The story entitled Our Miserable 21st Century contains a wide variety of frightening statistics that every thinking American needs to see.

Fewer Americans are working

Eberstadt does a great job of exposing the sorry state of employment in America and demonstrating that far more people are out of work than people want to admit. Some of the highlights of his research include:

  • The percentage of Americans over 18 who were participating in the workforce, the work rate fell by 5% between 2000 and 2016.


  • If true that means the population of Americans that is not working increased by 16.229 million – over the past 16 years. That works out to an increase of roughly one million people each year. The population of the United States was 324.58 million on February 21, 2017, according to the U.S. Census’s Bureau’s Population Clock.


  • Theemployment rate is an outdated and inaccurate measure of unemployment because it only measures those without jobs who are actively seeking work.


  • “Thus the “unemployment rate” increasingly looks like an antique index devised for some earlier and increasingly distant war: the economic equivalent of a musket inventory or a cavalry count,” Eberstadt wrote.


  • For every American man between 25 and 55 who is counted as unemployed there are three more who are not working.

  • That means the real unemployment rate for that demographic is 23.5%, not the 4.7% in the official rate. That number is close to the percentage of people unemployed in the Great Depression when the rate hit 25%.


  • The work rate in the United States is at its lowest level in 30 years.


  • 53% of people of working age were not participating in the labor force.


  • Eberstadt thinks the number of Americans working has fallen by 10 million since 2000.


  • The work rate for American women is also is falling. The percentage of American women working has fallen back to what it was in the 1980s.


  • The number of paid hours of work performed by the U.S. population fell by 12% between 2000 and 2015.


  • The population increased by 18% even as the amount of available work fell.



  • One out of five working age men in the United States is on Medicaid the federal health insurance program for the poor.



  • 21% of all civilian men between the ages of 25 and 55 were on Medicaid.


  • Since the eligibility level for Medicaid is 138% of the federal poverty level or $16,243. That means up to 21% of American men of working age are making less than $16,243 a year!! Note: some states have a higher threshold for Medicaid eligibility.



  • 57% of the nonworking men in America in 2013 were collecting disability.


  • One out of eight American males is a convicted felon.


All this shows us that America may now face an unemployment crisis as great as that during the Great Depression. The difference is that little is being done about it except proposals for new tariffs and infrastructure.

Eberstadt offers few explanations for this dismal situation. Instead he just presents the facts and let readers make up their own minds. He is doing us all a great service by exposing the government’s unemployment rate cover up.

Trump is not Likely to Help

Disturbingly one very smart American thinks that President Trump’s efforts might make the situation worse. Shark Tank star, billionaire investor and Dallas Mavericks owner Mark Cuban thinks Trump’s plans to use tariffs to force the construction of more factories in America will fail to produce jobs.

“I’m willing to bet that these companies building new plants … this will lead to fewer people being employed,” Cuban told CNBC. His thesis is that factories will mostly employ robots and not people.

Cuban’s prediction seems to be coming true, Ford (NYSE: F) plans to build a factory in Mexico, and will invest the money in the renovation of a factory in Flat Rock, Michigan, instead. That will create 700 jobs but the factory will build self-driving cars and most of the work will be done by machines.

Cuban is concerned because Trump and his advisors do not understand modern technology. He’s particularly scared because Team Trump seems to be ignorant of recent advances in artificial intelligence and machine learning.

This means the only people who might get jobs out of the Trump agenda are Border Patrol officers, immigration lawyers and robot salespeople. If Eberstadt and Cuban are right the rest of us might be screwed.

That sounds like a prescription for civil unrest and political upheaval for me. Especially when the working class realizes it has been scammed by Trump.