Economic Pictures Still Sucks - Especially If You're Young

I am going to get a little wonky in this article. If you don't want to read the details, here is the summary: Older folks (55+) are staying in the work force more, younger people (25-) are not in the work force and the net effect is that the total percent of people working has declined. You may now skip to What You Should Be Reading below

Net effect graphically:

U.S. Civilian Labor Force Participation Rate. Source bls.gov.

An interesting article by Ben Casselman at 538 about the declining labor force participation rate reminded me that all the happy talk about the unemployment rate is pure bunk.  He applies some modeling to conclude that of the 8 million missing jobs illustrated by our graph above, some were lost due to demographic trends and things like fewer teens. Ben's somewhat charitable assessment of the Obama recovery:

Our final tally, then, is that 2 to 4 million of our original 8 million “missing workers” might return to the labor force as the economy improves. That’s a lot of people: If all of them were considered unemployed, the unemployment rate would now stand at between 7.8 percent and 9 percent, down significantly from the worst of the recession, but high enough to suggest an economy that is still far from fully healed.

However, fellow SLOB, W.C. Varones pointed out on Twitter that Ben's explanatory model was also bunk.  The situation is actually worse.

@wcvarones @NYTimeskrugman great article on missing jobs and real unemployment rate from 538. http://t.co/G2W29QNmYA
— B Daddy (@BDaddyLiberator) March 27, 2014

The link is to a great article by the indomitable Zero Hedge that looks at the data underlying the top level statistics.  I downloaded my own data from the BLS to illustrate.

Here is the civilian labor force participation rate for the geezers since 2000:

U.S. Civilian Labor Force Participation Rate for age 55+. Source bls.gov.

And here is the same data for the youngsters (16-24).

U.S. Civilian Labor Force Participation Rate (16-24). Source bls.gov.

It is pretty obvious that the drop in participation rate is far great for the younger age population.  Demographic trends of the older folks retiring is pure bunk.  These statistics bode ill for the future because we aren't getting youth employed when they should be starting their working lives.  The "real" unemployment rate?  Who knows, but just based on the 8 million lost jobs, it would be 11.8%.  Even if you don't think that is a fair analysis, that represents lost production in the economy and lost income to the population as a whole.  It's a little late in the game for Obama to be blaming Bush.  And as for you millenials who keep voting for Obama and his cronies, what is wrong with you?

Late add:  You know what would really help youth unemployment? Increasing the minimum wage to further disconnect their pay from their skill levels.


What You Should Be Reading.

• Dean updates us on the High Speed Choo-Choo debacle. Bottom line, maybe not so fast.  I love Neel Kashkari's retort to someone who claimed the voters approved this. "They voted for a train about twice as fast and half the price."
• College Insurrection, because they cover the college scene from a unique conservative perspective.
• About Bob Brewer's campaign for District Attorney, because maybe we need a DA who didn't oppose gun rights in D.C. v Heller and will work to normalize the medical marijuana situation in the city.  (This is not an endorsement of Brewer, I just have issues with Bonnie Dumanis who was also weak on Prop D as well.)

McDonald's, Subway then In-n-Out

The title of the article refers to my dining plans for breakfast, lunch and dinner in light of the "fast-food" strike set for tomorrow.  I will be showing solidarity with the workers of those establishments who choose to show up and provide the generally good service we have come to expect in all American businesses.  I predict that I will have no trouble getting my meals, as the "strike" is an astroturf operation of the SEIU.  If the strike by San Diego's roughly 8,000 fast food employees was otherwise, why would the strikers only gather at a single establishment downtown?  For the publicity and the photo op, of course.  I just feel sorry for the jurors who won't be able to hit the Wendy's on their break from duty.  Other than that, this will be a great big fizzle.  To my astroturf point, the AP is reporting:

Mary Kay Henry, president of the Service Employees International Union, which is providing the fast-food strikes with financial support and training. . .

The strike is stupid for other reasons.  If the strikers were successful, then eventually fast food outlets would employ vastly more automation to make their meals, reducing the number of employees.  Further, it would harm the nation's economy by not providing entry level positions that allow young people to learn the life skills necessary for success at work. How is that fast food workers would get paid $15 an hour when my son only gets minimum wage in his union job at the grocer?  McDonald's spokesperson Ofelia Casillas:

"Our history is full of examples of individuals who worked their first job with McDonald's and went on to successful careers both within and outside of McDonald's," 

Exactly. The call for higher wages not supported by skills hurts job creation.  I think employers should fire workers who miss their shift to strike tomorrow, but I could understand wanting to play it low key.  McDonald's is doing so:

Casillas said in an email that McDonald's did not plan to take any action against employees who participate in the strike.

In trying to explain why the strike is needed the SEIU set up this young man:

Diego Rios, 18, who works at a downtown San Diego McDonald's as a crew trainer, said he struggles to make his monthly rent of $1,150 on his $8-an-hour wage. While he's nervous about leaving his job to participate in the strike, he feels strongly about pressing for higher wages.
"We’re on our feet all day long, eight hours a day," said Rios, who does everything from making fries to operating the drive-through window. He's been working at McDonald's for the last year and a half. "It’s very hard work, and for people like me who have families to take care of and bills to pay, $8 an hour is not enough."

A few questions.  What life choices led Diego to be supporting a family at age 18.  Since he apparently lacks the skills to do much else, how is he gong to make a living when he is unemployed because McDonald's could no longer afford him?  What is Diego doing to get some salable skills that will allow him to earn more?

So join me tomorrow at a fast food joint, this could be a boon for the industry, and it will help reduce youth unemployment.