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Heat Death

It's a little known fact that the US population is growing at twice the rate of China's: that is to say 0.91% to 0.47%. That made it doubly surprising to learn that the US work force has shrunk by over a million workers. Investor's Business Daily writes:

In the 30 months since the recession officially ended, nearly 1 million people have dropped out of the labor force — they aren't working, and they aren't looking — according to data from Labor's Bureau of Labor Statistics. In the past two months, the labor force shrank by 170,000.

This is virtually unprecedented in past economic recoveries, at least since the BLS has kept detailed records. In the past nine recoveries, the labor force had climbed an average 3.5 million by this point, according to an IBD analysis of the BLS data.

In December of 2011 Reuters wrote that the much-touted decline in the unemployment figures had a dark aspect to it. "The fall in the unemployment rate was aided by 315,000 people leaving the workforce."

That pushed the participation rate, a ratio of the amount of the population in the labor force, down to 64.0 percent. Those who exited the workforce, many of whom gave up on looking for work, outnumbered the 278,000 people who found jobs, according the Labor Department's household survey, which is separate from payrolls data.

At this rate things will get better each year until things finally collapse.

So maybe times are really hard. But what the solution to the problem should may depend on who you ask. For example, Occupy Wall Street believes in fighting poverty in its own way.

“Poverty, an issue to which King showed increased focus in the years just before his death, finds its way into the darkest chapters in American History. Dr. King sought to shine a light of justice against those dark chapters of war, repression and racism, our candles symbolize that light,” says Abigail Keegan of Occupy Wall Street ...

At 6:30 p.m. hundreds of Occupy Wall Street activists will assemble on the steps of the Cathedral Church of Saint John the Divine (1047 Amsterdam Avenue) and at 7:00 p.m. begin a massive candlelight march to nearby Riverside Church (490 Riverside Drive). The group will join additional feeder marches and members of the community at Riverside Church for a candlelight vigil and celebration renewing King’s message of peace, justice, and equality for all, regardless of race or economic class. The action will culminate in an assembly featuring performances and speak-outs from artists, celebrities, religious leaders, and activists. Performances by Patti Smith, Steve Earle, Stephan Said, and Kozza Olantunji, as well as many more, will complement the inspirational words of Dr. Benjamin Chavis, Yoko Ono, Russell Simmons, Reverend Stephen H. Phelps, Daisey Kahn, Norman Siegel, Sumumba Sobukwe and Malik Rhasaan of Occupy The Hood.

And they are sure to urge that jobs are preserved, by which they mean government jobs. In Pennsylvania, Change.org is protesting closures in the Chester School District which is laying off teachers because the state government is running out of money. They are demanding that the Governor find the money -- from somewhere.

“Our kids and their futures are in jeopardy,” said Jennings, who launched the campaign on Change.org. “They deserve to have teachers who actually get paychecks for their work and a school district that will be reliably open for the full school year. We have to get our schools on the right track so kids like mine don't suffer for the mistakes of this school district.”

“During his election campaign, Governor Corbett promised that ‘every child in Pennsylvania, regardless of their zip code or economic status should have access to the best education possible,’” Jennings added. “Chester Upland needs rescuing right now, and if the Governor can’t find the money to deal with this emergency, he’s failing voters and our state’s children.”

The state assembly passed a budget last summer that included massive education cuts and forced Chester Upland to lower its operating budget by about $18 million, furlough more than 100 teachers and merge two high schools, among other cost-cutting measures.

The governor can either find more money from taxes or debt. But if one leaves aside debt,  taxes must surely come from a shrinking workforce. How do you tax workers who aren't there? Well you tax the rich, right? That's why Occupy Wall Street is in Wall Street. They want the stash.

Ultimately Change.org's Jennings is right: "our kids and their futures are in jeopardy".  But exactly why they are in danger is the question that divides the country.

One approach is fix the problem by making things "fair" -- to reduce everything to a common economic temperature so that we all get more or less the same thing -- from our net wages if we work or from the government if we don't. From private jobs, which everybody knows are created by government incentives, or government jobs, which everybody knows are funded by taxing the private jobs.

The other approach is to allow a differential so that market forces are driven by forces that are trying to equalize, but never quite succeed. The first approach promises a kind of social tranquility at the cost of heat death. The second opens the path to creative destruction; to a world of striving, envy and ambition. Each approach has its own problems.  The problem in the first case will be how to put the food on the table. The problem in the second case will widespread discontent because many people have nowhere near as nice a wide screen TV as their neighbors.

Which view you adopt partly answers the question of why have more than a million workers stopped looking for jobs. It describes the signals being sent out to the workforce and who from.  What do you say to those people out in the dark? Is there a future for you? Or is there nothing for it but to look back in wonder?


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