Economics question.

[mav]

The current headline on Drudge states that 90 million people are out of the labor force.

http://www.zerohedge.com/news/2013-04-05/people-not-labor-force-soar-663000-90-million-labor-force-participation-rate-1979-le

 

Question.  How do they derive that number?  Does that number include those who can't work, such as small children and the elderly?  If it is based off the entire population, it is around 29%.  If it is based off the adult population, it is over 36%.  If you rule out the top 1% who do not have to work, and in this case we will assume they do not, the number based on the adult population is still around 23%.

 

I know politicians have really screwed things up over the years, but to have around a 63% labor participation rate seems highly questionable to me.  I know things are bad out there, but damn, one out of three adults aren't working?  If those numbers are indeed accurate, I am shocked that we have not seen a bunch of pitchforks and torches in Washington.

[macville]

They pull it out of a place where brown stuff normally comes out. They have no clue. There's no way to accurately tell. It's a guess (and from past examples, 99% of the time, a very poor one) because the numbers they base it off of are either incomplete, or rigged-like we've seen in the past.

[atlas3025]

I belive it is people who are not working or are not looking for work.  So of course that second part has to be "WAG'd".

[Raoul]

Might also include "underemployed"

[ShamGlock]

The official number does not include underemployed. If you are working more than 8 hours a week you are pulled out of the unemployment stat. Even if you have a Masters degree and can only find work at a gas station. 

[Guest 6.8 AR]

We should have had the pitchfork thing going several decades ago.

[BigK]

It also only includes people OF WORKING AGE and they've never included farm workers or generational welfare recipients in the unemployment numbers. The crappy part is that all these stats that politicians spin are base on 2 surveys (payroll survey and household survey), both of which have huge drawbacks.

 

Part of the recent decline in the labor participation rate is due to people whose unemployment benefits have run out. These people are removed from the unemployment calculation as "no longer looking for work". Many have moved back in with parents or transitioned to welfare/food stamps.

 

Here's a good link: http://www.bls.gov/cps/cps_htgm.htm

Edited April 5, 2013 by BigK