The labor force participation rate is a measure of an economy’s active workforce. The formula for the number is the sum of all workers who are employed or actively seeking employment divided by the total noninstitutionalized, civilian working-age population.
From what I can deduce, though, the US government statistics start at age 16, and there is no upper limit. I'm thinking we don't want large numbers of 16 and 17 year olds in the labor force year-round, and similarly we don't want 95 year olds in the labor force either.
Aha! I have learned something today! Although, in this case, I'm pretty sure they meant education, unless this is some sort of very subtle metaphor. But yeah, spellcheck would not know that, you're right.
"getting more education" is correct usage. Getting education and getting educated are two different things. People can get education without getting educated and vice versa.
I bring this up every time people discuss working week length, productivity etc. We have massively reduced the percentage of people working. But instead of giving everyone 2 extra days off, we gave 40% of people all the days off and made the rest work harder...
Yeah, let’s instead have the Baby Boomer drive the deficit “beyond affordable for any generation”, destroy health care once and for all and make education and university really unaffordable. And make any change structurally impossible and shoot up everyone who doesn’t like the system they are left in.
I’m from Europe and “our” previous generations nicely screwed all the ones after - but the US is just insane.
Or just peg social security collection age to life expectancy and reduce payments.
It's kind of insane that everyone knows millennials are worse off than their parents were, but are expected to pay the bills of the failed social security system. It's a dick move for boomers to collect full social security and act like they deserve it.
Actions have consequences. Secondly, other societies have already solved this issue by means of a charity tax that is much more affordable than social security: https://en.wikipedia.org/wiki/Zakat
The goal is general welfare, not at the expense of wasting money or taking more money than necessary from the rest of the population. This is exactly what Zakat establishes.
The issue is that the macroeconomics don't add up. Millennials aren't having enough kids, so at the current population growth rate there won't be enough workers to sustain the system in its current form. We obviously need to take care of the baby boomers, but there needs to be a fundamental shift in thinking to solve this problem.
It's fascinating that from the 1950s to the 1970s employment was hovering around 57%. Formal employment has actually increased 1970-2015 as workers in our economy became more productive. It's interesting this correlates to the decline in real median wage gains, which have plateaued since the 1970s.
I think that's a faulty analysis. TFA does much better job separating things by age, comparing changes over time, and looking at evidence for the reason behind those changes.
For example, having the 16-25 labor participation rate decrease could be considered a good thing (maybe, it's debatable), but the increase in people on disability is usually a surefire indication of an economy not offering people on the margins a way to work. Most people on the "margin" for disability will work if the job market is good and will go on disability if it's bad.
In Soviet Russia people worked 10-12 hours a day 6 days a week, on average .
Because they were poor.
Poor people work a lot, in Scandinavia the average work week is 30 hours, plus 41 days of paid holidays/year, plus no less than 480 paid days for parental leave, because they are a rich country and can afford it.
Why people in US think that working a lot makes you rich, when the opposite is true?
You can't generalize Soviet Russia this way, without quantifying the particular decade of the country's 74-year existence.
Prior to, and during the second world war, Russians worked like slaves, yes.
But starting in the 60s, the urban workweek became 41 hours over 6 days. [1] Kolhoz farmers, though, continued to work insane hours (for almost no pay) throughout the country's existence. (And much like in China, they could not leave the Kolhoz to go work in the cities.)
[1] Yes, some employers had really shitty overtime expectations. However, depending on other economic conditions, those employers could have also have a hard time attracting and retaining workers. Contrary to the popular belief in the West, you weren't just assigned a job at 16 that you had to work for the rest of your life.
> Why people in US think that working a lot makes you rich, when the opposite is true?
For most people, wealth is tied to income, and income is tied to the number of hours you work. So it's a direct link in their minds that most hours of work leads to more wealth.
The fairly obvious truth is that the quickest way to any reasonable amount of wealth is to both improve your skillset to increase the amount of income you can make per hour, and also to develop sources of income that aren't tied to the number of hours you put in.
But both of those require delayed gratification, which people aren't big on.
I mean, in some ways you're both right. Greece (surprisingly) works the longest hours in Europe, but their average productivity is very low compared to Northern Europe.
Also, in the US, our tax structure clearly greatly rewards investment income over wage income. Of course, most people need to work to get enough capital to invest in the first place.
For the older cohorts, isn't it possible people are doing informal work and not reporting it?
As for the younger cohorts, it used to be a thing that you'd work a bit in order to build up your CV. These days, it seems like a lot of things that you could do simply don't count towards a career anymore, there's been a cultural shift where many hiring managers don't buy that a job in another industry helps much. Waiting tables used to be a just fine way to show you were able to work, now you need an internship in a bank or you may as well not bother. Same with many other professions.
My pet theory is that labor force participation declines and "automation" go hand in hand across all industries.
Automation isn't robots it's what used to be a 10 person marketing team doing the same amount of work but being more productive as they're all much more cross skilled and have more tools at their fingertips.
Same with some aspects of dev/operation. Same with some aspects of legal. Same with some aspects of medical/surgery.
The net result is that you end up with more roles that are senior level and less opportunities for entry level.
I agree with a slight adjustment: i actually believe it is both robotic-type of automation, as well as, fewer people forced to do more than previous workers. I think if a company makes physical things or is moe under the blue collar type of output, then maybe the percent sways slightl more towards physical automata such as robots, but also might include the "less people doing more" aspect. Now, when the companies are more knowledge-based/white collar work, then the percents flip...but again, i think this is all nuanced, and no single form of automation prevails universally.
> ...The net result is that you end up with more roles that are senior level and less opportunities for entry level.
I've felt this has been a thing for almost two decades now...And, if you're right, (and my spidey sense/tingling feeling) has been confirmed, then it would be very scary! I wonder if the apprenticeship models that have been championed and succeeded in places like Germany, will eventually force our nation to adopt them, and veer away from the traditional (college-esque) route because there simply is too few entry level options now? I'm not saying the college or the apprenticeship route is best, or if there's even room for a hyrid, just pondering based on your hypothesis, which i actually, scarily agree with.
> I actually believe it is both robotic-type of automation
It doesn't even have to be automation. A lot of it is just enormous scaling up of equipment.
For example, road building used to take hundreds or thousands of people with shovels and wheel barrows. Now it's a crew of ten or twenty people driving enormous earth moving machines. Same with farming. What used to be a guy with a horse pulling a single row planter is now a guy in a tractor with a 40 row planter.
A lot of productivity gains in industry are similar. Things get scaled up to ridiculous levels that people a hundred years ago couldn't even dream of.
Agreed, I can't deny the vast gains in efficiency. But I'm also referring more to bosses and owners of capital squeezing wherever they can, including reducing headcount but reducing work/business.
I agree. I think the coming change is much bigger than anyone is prepared to handle..
We are in a transitional period - the utopian endpoint of technology was always to perfect/automate so much that there is no need for humans to work (except on what you want to of course), but as we get closer we have no idea what society is supposed to look like in that world.
Politicians still promise jobs, the Fed targets employment, the entirety of society is built around the idea of working to make a living. Those ideas don't even necessarily make sense in a world of increasing automation - at some point if everything keeps getting 10x more efficient, there simply won't be enough jobs of any kind to go around.
It means a transition to an entirely different way of organizing society - we don't know what it will look like and its going to be a very bumpy ride.
If you think about it, on average people work less than a few percent of their life. Assuming a 40 hour work week, that means about 2/3rds of a working day you are not working. Factor in vacation, weekends, national holidays and basically you get to work for about 2/3rds of the year for about 1/3rd of the time. That's a bit over 20% of your time. You do that between when you finish studying until you retire for about 40-45 years give or take. The average age in a lot of countries is close to 80. So, an average productive life, would mean working maybe 10-15% of your time. It feels like more but you spend more time sleeping (33%, assuming a healthy 8 hour rest). Some of us of course work longer and harder. But we're talking averages here.
Now of course not everybody works and quite a few of us do things that arguably aren't that critical or important. There's actually quite a bit of busywork that really doesn't matter that much to anyone; including those paying for it. Companies regularly discover they can safely fire a few percent of their workforce when the time comes to scrape out some more efficiency to please shareholders. Most of us are not really not working at all most of the time, even if we are employed.
This is a big change from pre-industrial revolution life where you worked from early age until you were physically unable to do something useful, which was shortly before death, which for those that worked hard came pretty early on average.
This is not a problem because most of the things people did then are now done by machines.
"For the fourth quarter of 2004, according to OECD (Employment Outlook 2005 ISBN 92-64-01045-9), normalized unemployment for men aged 25 to 54 was 4.6% in the US and 7.4% in France. At the same time and for the same population, the employment rate (number of workers divided by population) was 86.3% in the US and 86.7% in France. That example shows that the unemployment rate was 60% higher in France than in the US, but more people in that demographic were working in France than in the US, which is counterintuitive if it is expected that the unemployment rate reflects the health of the labour market."
More unemployment by the official measure (normalized OECD) but ... more people working relative to given population.
Yes, unemployment is 1 - employed / (employed + looking for work), "looking for work" is really hard to measure objectively (changing a word or order of words in the question asked in the survey change it by quite a bit).
employed in a given group / total population of a given group is more objective. There's still a bit of hacking of this one with for example "non institutionalized population" excluding people in jail (not negligible in the USA)
What baffles me is that there's no deep study of the "inactive" population, while the number of inactive has been raising continously for a few decades now in the USA, yellow line here:
I'm not sure this is that unintuitive once you know what unemployment means technically: the key aspect of the definition of unemployment is that to be unemployed you have to be actively searching for work. If more of your population is actively searching for work, as opposed to less, it stands to reason that more people might eventually find work.
Then you may have to question "lower unemployment is better": for example is the explanation for the France/USA unemployment difference that more USA people have completely given hope of finding a work and are rejected by society?
In the media it's always "super high unemployment in old Europe, super good low unemployment in the USA".
My hunch is that the USA has low employment due to its terrible healthcare for poor people; I get the impression that people there get sick and then fall out of the labour market permanently.
I think we may be consuming different media. The narrative I hear is (prepandemic) "the UK has record low unemployment but this is bad because it is low quality work with high underemployment".
- play video games, mostly strategy with a few RPGs and platformers
- exercise for 30 min - 1 hour every day
- do all my own cooking, house work, take on DIY projects
- read books, mostly fantasy, sci-fi and science text books for pleasure
I'm much, much happier than when I was employed as a software engineer. I highly recommend people to save money and leave the workforce and instead live a life of leisure as a capitalist and independent scientist.
I plan to get wealthier during this "break" if the algo performs anywhere near as well as the backtest, 28% with 10% max drawdown. If all goes to plan, in 20 years I will be running my own research institution part time, but I hope to always have plenty of leisure time in the future. The 8 years before I quit were hell in comparison to my life now and I don't want to ever go back to that way of living
Did you run algos professionally before you quit? I’m trying to get some kind of chat forum going for people doing what you (and I) are trying, not sure how to gather up a sensible sized posse.
I didn't, but always been interested in the financial markets from a young age. I frequent /r/algotrading and sometimes seeking alpha, sometimes useful stuff posted. I'm not doing HFT though, my algo holds on average for about 20 days
I'm a frugal guy, have enough dividends/interest from the conservative long term holdings to cover my basics, algo for providing long term prosperity and luxuries only. So far in the backtest it performs at 28% ROI with 10% max drawdown in the testing period of april 2009 - april 2020 vs. 11.5% ROI for SPX and 36% drawdown
I’ve struggled with the same transition. Do you have any trouble with feeling a lack of purpose? Restlessness?
Many days when I should be perfectly happy and content,instead I feel like I’m waiting for something to go wrong and piss me off. It feels really stupid to be anxious about nothing.
Yes, the anxiety at the beginning and lack of purpose was strong, but over time it has faded and now I am used to the lifestyle and make my own purpose. I do plan to contribute more to society in the long term. I want to eventually start my own research institution (if algo goes bonkers). Algos do add liquidity to financial markets and help prevent bubbles like 2000 and 2007 from forming through greater market efficiency as well. However, right now I'm still enjoying my "rest" phase as the 8 years before that were not fun, long hours, long commute, so I don't feel bad about getting some break.
Thanks man. Very similar plans as you :) My plan is to eventually start a small fund dedicated to giving a few semi-random individuals a perpetual basic income.
How do you plan to get back to work-force after the money you saved up run dry?
Majority of software engineers are able to save up for few years forth of expenses by not going into any major investments.
To give an example - I can stop working for 3 years now, but Ill have huge issues explaining that afterwards. And if I plan to build a house - there is no option for me to stop working for the next 10 years.
Well that’s definitely a life choice I haven’t made. But assuming your wife brings her own 300-400k to the party (only fair) then it’s completely doable.
Well, being pragmatic you could still retire on 400k with a family of four in Portugal, especially outside the capital, and on a very reasonable standard of living. I just prefer to assume a per-adult-capita amount. Sorry if that was unclear originally.
Few years without side projects can really put you out of business in IT if you dont have a very specialized knowledge. Im not gonna talk about management path because „few years adventure to seek out true self” can be seen as „brave” and „what a true leader would do” yada yada
I'm very frugal, it would be difficult for my stash to be depleted. My conservative long term investments provide more than enough cash flow for my basic necessities - I only put extra in the algo for now, though the algo is less volatile so far than my long term investments.
I did the same, but I moved to Latin America, where its so cheap I can live off side hustle money. I can't imagine ever going back to work in the US or EU, that rat race is NOT worth it IMHO. I'd rather stay right here and make 20% what I made there and live just as comfortably, but with basically all my free time intact.
Ecuador. I used to live in Denmark and paid $1500 a month for substantially less space than I have now for $160 (and the bathroom in my Danish place was terrible). My whole family can live on about 300 to 400 a month here. I cannot even begin to describe how much better I feel being able to live like a semi-retired person. I don't need to worry about going in to a 9-5 anymore, can take interesting projects on as I like, and no idiotic coworkers who try to convince me that 1500 is actually a good price for a shitty little apartment in downtown Copenhagen (cause I guess someone told them it was).
You actually Danish? Or did you move there and then on to Ecuador? Did you learn a new language twice? Just curious whether you were born into it or moved several times for QoL.
No, I'm US, I moved to Europe for QoL, then went to South America for the same. After Trump got elected, I felt pretty vindicated on the decision and have no plans to go back to the US. Also, I didn't learn Danish, it's really hard (3+ years to be any sort of good at it, usually) and you can only speak to 5M people once you learn it anyway. Plus all the educated Danes speak flawless English, they watch our TV from birth. I'm working on Spanish right now since its much easier and you actually need it in SA. If you're giving any thought to it, I stringly recommend moving abroad, even for a short time, you will grow more than you can imagine and get exposed to so much that you just can't get in your home country.
56% of US population was not working in July 2020 according to BLS numbers. US population is 328M. 144M are working civilians. Add 2M for military employment. 44% employment rate.
Note in the last election a couple of candidates would have said the the US unemployment rate was 56%, not 11%. They counted everyone who wasnt working as unemployed, including 1 year olds and 90 year olds.
106 comments
[ 4.6 ms ] story [ 190 ms ] threadA particularly unfortunate spot in the article for the editor to have missed a misspelling. Even in 2015, surely they had spellcheck?
Well, eduction is a word, so it would have spelled ok.
https://tradingeconomics.com/united-states/employment-rate#:....
I bring this up every time people discuss working week length, productivity etc. We have massively reduced the percentage of people working. But instead of giving everyone 2 extra days off, we gave 40% of people all the days off and made the rest work harder...
I’m from Europe and “our” previous generations nicely screwed all the ones after - but the US is just insane.
https://news.ycombinator.com/newsguidelines.html
It's kind of insane that everyone knows millennials are worse off than their parents were, but are expected to pay the bills of the failed social security system. It's a dick move for boomers to collect full social security and act like they deserve it.
So you're fine with these people just outright dying on the street?
Also as someone who lived in system that had Zakat, it was supplemented with state-sponsored retirement.
It can be supplemented upon need, it is still a strictly more fair system. Did that state collect social security or income taxes though?
https://www.crfb.org/socialsecurityreformer/
https://news.ycombinator.com/newsguidelines.html
https://news.ycombinator.com/newsguidelines.html
For example, having the 16-25 labor participation rate decrease could be considered a good thing (maybe, it's debatable), but the increase in people on disability is usually a surefire indication of an economy not offering people on the margins a way to work. Most people on the "margin" for disability will work if the job market is good and will go on disability if it's bad.
Soviets did have everybody work all 5 days, that didn't quite work for them economically.
In Soviet Russia people worked 10-12 hours a day 6 days a week, on average .
Because they were poor.
Poor people work a lot, in Scandinavia the average work week is 30 hours, plus 41 days of paid holidays/year, plus no less than 480 paid days for parental leave, because they are a rich country and can afford it.
Why people in US think that working a lot makes you rich, when the opposite is true?
Prior to, and during the second world war, Russians worked like slaves, yes.
But starting in the 60s, the urban workweek became 41 hours over 6 days. [1] Kolhoz farmers, though, continued to work insane hours (for almost no pay) throughout the country's existence. (And much like in China, they could not leave the Kolhoz to go work in the cities.)
[1] Yes, some employers had really shitty overtime expectations. However, depending on other economic conditions, those employers could have also have a hard time attracting and retaining workers. Contrary to the popular belief in the West, you weren't just assigned a job at 16 that you had to work for the rest of your life.
Because many of us know people that worked their ass off and became wealthy. Does that not happen in Europe?
But we still have 4 weeks of paid vacation.
Doesn't that happen over there?
For most people, wealth is tied to income, and income is tied to the number of hours you work. So it's a direct link in their minds that most hours of work leads to more wealth.
The fairly obvious truth is that the quickest way to any reasonable amount of wealth is to both improve your skillset to increase the amount of income you can make per hour, and also to develop sources of income that aren't tied to the number of hours you put in.
But both of those require delayed gratification, which people aren't big on.
Also, in the US, our tax structure clearly greatly rewards investment income over wage income. Of course, most people need to work to get enough capital to invest in the first place.
As for the younger cohorts, it used to be a thing that you'd work a bit in order to build up your CV. These days, it seems like a lot of things that you could do simply don't count towards a career anymore, there's been a cultural shift where many hiring managers don't buy that a job in another industry helps much. Waiting tables used to be a just fine way to show you were able to work, now you need an internship in a bank or you may as well not bother. Same with many other professions.
If this whole meditation trend reaches its logical conclusion, you'll understand.
Automation isn't robots it's what used to be a 10 person marketing team doing the same amount of work but being more productive as they're all much more cross skilled and have more tools at their fingertips.
Same with some aspects of dev/operation. Same with some aspects of legal. Same with some aspects of medical/surgery.
The net result is that you end up with more roles that are senior level and less opportunities for entry level.
> ...The net result is that you end up with more roles that are senior level and less opportunities for entry level.
I've felt this has been a thing for almost two decades now...And, if you're right, (and my spidey sense/tingling feeling) has been confirmed, then it would be very scary! I wonder if the apprenticeship models that have been championed and succeeded in places like Germany, will eventually force our nation to adopt them, and veer away from the traditional (college-esque) route because there simply is too few entry level options now? I'm not saying the college or the apprenticeship route is best, or if there's even room for a hyrid, just pondering based on your hypothesis, which i actually, scarily agree with.
It doesn't even have to be automation. A lot of it is just enormous scaling up of equipment.
For example, road building used to take hundreds or thousands of people with shovels and wheel barrows. Now it's a crew of ten or twenty people driving enormous earth moving machines. Same with farming. What used to be a guy with a horse pulling a single row planter is now a guy in a tractor with a 40 row planter.
A lot of productivity gains in industry are similar. Things get scaled up to ridiculous levels that people a hundred years ago couldn't even dream of.
We are in a transitional period - the utopian endpoint of technology was always to perfect/automate so much that there is no need for humans to work (except on what you want to of course), but as we get closer we have no idea what society is supposed to look like in that world.
Politicians still promise jobs, the Fed targets employment, the entirety of society is built around the idea of working to make a living. Those ideas don't even necessarily make sense in a world of increasing automation - at some point if everything keeps getting 10x more efficient, there simply won't be enough jobs of any kind to go around.
It means a transition to an entirely different way of organizing society - we don't know what it will look like and its going to be a very bumpy ride.
Now of course not everybody works and quite a few of us do things that arguably aren't that critical or important. There's actually quite a bit of busywork that really doesn't matter that much to anyone; including those paying for it. Companies regularly discover they can safely fire a few percent of their workforce when the time comes to scrape out some more efficiency to please shareholders. Most of us are not really not working at all most of the time, even if we are employed.
This is a big change from pre-industrial revolution life where you worked from early age until you were physically unable to do something useful, which was shortly before death, which for those that worked hard came pretty early on average.
This is not a problem because most of the things people did then are now done by machines.
https://en.wikipedia.org/wiki/Unemployment#Limitations_of_de...
"For the fourth quarter of 2004, according to OECD (Employment Outlook 2005 ISBN 92-64-01045-9), normalized unemployment for men aged 25 to 54 was 4.6% in the US and 7.4% in France. At the same time and for the same population, the employment rate (number of workers divided by population) was 86.3% in the US and 86.7% in France. That example shows that the unemployment rate was 60% higher in France than in the US, but more people in that demographic were working in France than in the US, which is counterintuitive if it is expected that the unemployment rate reflects the health of the labour market."
More unemployment by the official measure (normalized OECD) but ... more people working relative to given population.
employed in a given group / total population of a given group is more objective. There's still a bit of hacking of this one with for example "non institutionalized population" excluding people in jail (not negligible in the USA)
https://www.census.gov/glossary/#term_Civiliannoninstitution...
What baffles me is that there's no deep study of the "inactive" population, while the number of inactive has been raising continously for a few decades now in the USA, yellow line here:
http://guerby.org/images/bls-men-25-54-200912.png
Understanding what the inactive are doing is probably key to understand current time (un)employment.
In the media it's always "super high unemployment in old Europe, super good low unemployment in the USA".
I think we may be consuming different media. The narrative I hear is (prepandemic) "the UK has record low unemployment but this is bad because it is low quality work with high underemployment".
- building an algorithmic trading bot
- play video games, mostly strategy with a few RPGs and platformers
- exercise for 30 min - 1 hour every day
- do all my own cooking, house work, take on DIY projects
- read books, mostly fantasy, sci-fi and science text books for pleasure
I'm much, much happier than when I was employed as a software engineer. I highly recommend people to save money and leave the workforce and instead live a life of leisure as a capitalist and independent scientist.
Many days when I should be perfectly happy and content,instead I feel like I’m waiting for something to go wrong and piss me off. It feels really stupid to be anxious about nothing.
Majority of software engineers are able to save up for few years forth of expenses by not going into any major investments.
To give an example - I can stop working for 3 years now, but Ill have huge issues explaining that afterwards. And if I plan to build a house - there is no option for me to stop working for the next 10 years.
Not everyone is in so proviliged place.
Here in Lisbon, you can live a perfectly comfortable life forever if you hit around 300-400k € in equity. That’s money, but nothing impossible.
Is that assuming single with no dependents?
If I were single, I could definitely see that working. But with a wife and three kids, it seems less possible.
600-800k isn't all that far off in the grand scheme of things.
[1] https://www.mrmoneymustache.com/
If you're good, employers don't really care if you take time off to do other stuff.
https://www.ssa.gov/policy/docs/briefing-papers/bp2019-01.ht...