Cousin Eddie gives up search for work.

    Like every other News host and pundit in the country John King of CNN commented this morning on the terrible job numbers reported by the Bureau of Labor on Friday.. "The drop in the unemployment rate is not good because hundreds of thousands of people gave up the search for work." This explanation of the drop in the labor participation rate has been repeated ad nauseam---for example, "too discouraged to look for work", or "quit because they couldn't find work". When I heard John King's comment, I got an itch on that spot on my inner thigh where I found a tick last summer. Now whenever I hear a blanket statement (other than one of mine), which doesn't quite ring true, that spot flares up.

    I went looking for polls by either John King or CNN which might help explain the increased number of people who have "left the work force"---or put another way, "are no longer in the work force". Not happy that people in general were just giving up their search for work, I wanted to find out why. But there wasn't any research by John King or CNN. So I perused information from the Bureau of Labor statistics. 

    Apparently about 2.7 million people over the past year have become "not in the work force." And 2.2 million of these are just not interested in work. Like CNN, the BLS does not ask these 2.2 million people about their motivations. What they do report is that 1.6 million of these folks are over the age of 65. As for the other 600,000, one has to make wild-ass guesses---such as, for example, maybe they decided to go ahead and complete the last year of nursing school so that they could actually get a good job instead of working as a cashier at Wendy's which wasn't even paying the gas bill.   

    I am increasingly irritated at reporters like John King because it seemed to me that the phrase, "gave up the search for work", left a lot of questions unanswered.  I began my own search for a tube of Benadryl anti-itch cream and then called my cousin, Eddie. who last year packed it in up in Shippensburg and moved down to the Villages in Florida.

    "Hey, Eddie, do you know you are part of a national trend? You're over 65 and no longer in the work force."

    "Yeah, they're moving in here by the droves. Myself, I'm happy as a clam quitting that crappy accounting job at the tire plant and retiring down here."

    "Quit your job?", I asked, "But you could have worked a few more years and made out better."

    "Well, when I did the numbers, it was better just to drop out now", he said, "The living costs are lower here, my 401K recovered over the last two years, I turned 66 so I got my Social & Security, I bought a car no bigger than a potato bug that I fill up once a month---and I'm enjoying myself. You should also do the numbers, Oxy, you're working too hard. Hey, I got to get over to the club house."

    "Wait", I stammered, "you mean you left the work force because you wanted to retire?"

    But Eddie had already hung up. I didn't even get the phone numbers of some other people down there. Unlike John King, CNN, the rest of the U.S. media, and the Bureau of Labor Statistics, I wanted to do some real research on whether people like Eddie had left the work force because they just gave up the search for work, or were simply tired and bored to death with their job and decided they'd be better off quitting and retiring down in the Villages.

    Perhaps I should change my title line above. Eddie in fact, did not give up his search for work. He simply quit, and for good reason. But like John King's pithy comments, my title headline is working fine for me so why change it---even if it is amateurishly misleading.

    I need to find an SS chart which demonstrates that annual beneficiaries are increasing at double the rate several years ago--figure 1946-2012 equals 66.  But right now I'm headed out to CVS to buy a new tube of Benadryl cream for the Sunday talk shows.    



    I know this isn't about John King and/or CNN per se, but both have been and are guilty of injecting this type of unfounded opinion (only) in their murky coverage of whatever issue they are addressing under the guise of reporting factual data.  Which is why I, for the most part, quit watching and consider them a credible 'news' outlet.

    Kudos for your research.  The facts, when culled from documented sources,  will always deliver the reality of the components of an issue, but sadly, so very few do what is needed to ascertain what is factual.  I actually hope you send this to CNN. 


    Thanks, Aunt Sam. I was just trying to recollect whether in Tampa CNN was pushing specfic memes like "better off" and taking "God" out of the platform in the manner they were doing in Charlotte. Well, at least they have a new toy in the job numbers.

    I retired at the age of 62 for nearly the same reasons but would never have moved to the Villages in Fl. I decided to leave Fl and return to Ohio.

    Garfield Heights just outside Cleveland where my COL is much lower than in Central Fl. and the people aren't bat shit crazy.

    Just taking time now to get myself squared away and then decide what to do next. maybe save up and take a trip to Europe while I still can.

    Let me do a little arm chair research. I understand that if one retires at 62 and takes SS, one  is penalized for other  earnings over $13,500.  I'm just wondering if you know whether after age 66, that penalty drops. A friend of mine asked me and I wasn't sure.

    I don't think I'm going to do anymore int'l travel. My passport expired this year and for the first time in my life it didn't alarm me.

    The penalty drops after you reach full retirement age. After that, you can make as much money as you want without losing any of your SS benefit.

    Thanks, Flower. I know a guy who "retired" at 62. He's working in a field where he has a lifelong interest but where he definitely won't earn more than $13.5 K a year. He's healthy enough to go back doing something with higher pay when he's 66. Just curious about such a strategy.

    Just warning ya that if you keep up this this line of argument you may become a target of lefty bloggers as an Obama koolaid drinker. I've seen more than a few blog entries in the recent past about how drop in labor participation rate is evidence of how much worse things are than the Obama administration says. (Here's an example from yesterday) So much so that I wouldn't be surprised if somewhere there is a new post that lauds John King for "finally getting something right."  As always, it all depends upon what story you want the numbers to tell and which facts are inconvenient to the narrative.

    As I've heard a statistician say, numbers are great. They will tell you anything if you torture them enough.

    BTW, agree with you on the Villages. And if the weather is as warm in the winter as it was up North last year, Florida isn't so attractive. But this year is supposed to bring a lot of snow, especially in Vermont.

    Well I like the cold I guess. it's 62 outside now and I have the windows open and it's just nice inside.

    Thanks, Artsy. The number in question is the 368 K, representing the drop in the size of the work force. It just seems that the baby boomer effect---the first ones turn 66 this year---isn't being discussed at all. Then if you add the pool of 62-65, it represents, it's a huge number. IOW, it's historic!

    ArtA. You know why some Lefty's gonna come on here and be mad about this? Because it's a moronic argument. If labour force participation had plummeted this low, under a Reagan or a Bush, people would be psychotic. The fact that it is taking place (really) and that it's occurring worldwide (gee) and that it's been rolling for tears now and that Dems are actually working to spin millions of people without work into retirees who are "happy as clams"? It's not about koolaid. It's about just plain old being an ass. 

    Happy as clams.

    That has to be one of the most callous, and most screwed up things I've heard in recent months. Which takes some doing after the RNC. 

    Happy as clams, down at the food bank. 



    Obviously each side is spinning this 368 K drop in labor participation. I was attempting to describe the quotient which is people saying they are no longer interested in work---which to my mind describes and includes many people like Eddie. It's just not accurate, in my opinion, to say they have given up the search for work.

    What we have is a terrible unemployment problem with a lot of good people in fact giving up the search for work. What happened to the economy is tragic. I in the past have called for a massive back to work program along the lines of Depression era programs. Otherwise, many of these people don't have a prayer of getting back into the work force. 

    My point was that demographics do matter, the population is getting a lot older. Many people opt out, one of the reasons is that work itself has been degraded---people are not respected for what they do, are underpaid and are screwed every which way by large corporations. Other people just think they would like to do things they want to do.

    I myself have been on SS for some time. I waited until there was no penalty for earning other income. That was a smart move on the part of Dole and Clinton. The penalty for extra income if you take SS at 62 is stupid and should be eliminated.

    Because there is no penalty, and for other reasons, I run a small business. I attempt to treat people the way I would like to be treated. For one employee the company helped him buy a residence because the work, in N. Cal, is in such a high priced area that he could not find any place to live. In fact, I personally loaned him money to buy a car with which to commute to work. 

    Over the past year I have added two employees. While my small service business can't meet the union wages they were paid before, at least they have gone back to work. I suppose I should be criticized for hiring them.

    If you read between the lines, I am a little envious of Eddie. Myself, I could sell the company and retire, but being a worry wart I wonder if I will outlive my money. My worst fear in life would be to show up on the doorstep of one of my kids asking for help. Talk about a loss of dignity, I know it, and I fear it. That's why I'm working way beyond 65. Also, believe it or not, I think about what my employees would do if I sold the company. Mostly they don't have formal education beyond high school, are older, and would be at the mercy of this shitty economy.

    Eddie probably has much more courage than me. Call is what you want, Eddie wanted to retire. And he is in a demographic which has materially shifted the retirement pool in the last few years and in my opinion is being given short shrift in the analysis of the drop in labor force participation numbers.  



    My point was that demographics do matter, the population is getting a lot older. Many people opt out, one of the reasons is that work itself has been degraded---people are not respected for what they do, are underpaid and are screwed every which way by large corporations.

    Not just large corporations, the public sector as well. Though a lot of State Universities are being run like corporations now with the same kind of slimeballs calling the shots.

    Thanks. I think there are a lot of martinets and far out individuals in supervisory positions. A friend was told by the plant manger that her supervisor had screwed up and would be replaced soon, presumably by her, which got my friend's hopes up for an advancement. The next day the manager and the supervisor were in a back room on their knees praying together. No more promotion. I just think that's not appropriate behavior in the work place.

    I hear you, Oxy. The thing is, anecdotes are very difficult to match up against huge aggregate numbers that cover a continent of people. When I read your note, I happened to be taking a break from a family wedding. At which there were numerous adults who are being crushed by unemployment. Most of them, over the age of 50. This includes 3 sibs by the way, so i know their situations very well. They look and they look for work, but each month, they sell stuff off, they run down their savings, their health gets worse, and their confidence falls. When they "stop looking," it won't be because they're Cousin Eddie. They will, effectively, have nothing. If you check the numbers, this is a massive problem amongst baby boomers. The blogs are full of know nothing's who like to play on the media story of recent decades, of the pampered boomers. And it bugs me. They're not all that way. 

    Yes, when the march of opportunity rejects your best effort to join it, you have learned something important about the market and your place in it. They aren't kidding about the invisible hand.

    Thanks, Qnon. People are in difficult situations, it was not my intention to minimize it. I myself was in that never never land of no health insurance in my late fifties and it was a very scary thing.

    I don't understand.  Why should you be criticized for hiring them?  You probably know that I'm an advocate for unions and collective bargaining, but none of that applies to small businesses like yours.  Anyone coming to work for you has to know you can't pay corporate wages and wouldn't even expect it. 

    You are the kind of employer every working person would be lucky to run into.  In fact--got an opening?

    Thanks, Ramona. Do you want to wear some rubber gloves, goggles, and steel toed shoes?  Actually I went out a couple of summers ago in the Texas heat and worked one of my trucks---it nearly killed me.


    Okay.  Maybe not.  But kudos to you, again.  You're one of the good guys.

    Aw, heck. blush

    Dude. This is so sad I'm not even gonna go after it. Yeah, don't worry, eh? It's all good. You're a Dem, it's election season, John King said it, so, ummmm, yeah. It's all good. People are leaving the work force because they're happy as clams. 

    P.S. Tthough before you put more of this shit out there, and before too many others chime in, you might want to actually research why they left the search for work, how long and hard they looked, what their drop in income looks like,what kinda debt they have, what states theyre in,etc. etc. Because frankly, blogs like this makes JohnKing look smart.


    And also, wow. Just... Wow. A Democrat wrote this. Wow.


    Reuters' Felix Salmon's analysis of the latest unemployment numbers confusion is very good plus he features one I did not know about:

    "The Bureau of Labor Statistics has an interesting-if-obscure data series called “labor force status flows”. Most of the people interviewed in the survey measuring the unemployment rate, it turns out, were also interviewed the previous month. So it’s possible to look at the number of people, on a month-to-month basis, who were unemployed last month and who were no longer in the labor force this month. Historically, that number has been somewhere between 1.5 million and 2 million per month, on a seasonally-adjusted basis. But when the recession hit, it spiked to more than 2.5 million, and even more than 3 million at the peak. And it’s still extremely high."

    Not good news.

    I think that the whole notion of "active job seekers" is problematic.  How active you are is going to depend on any number of variables like industry and geography and available opportunity.  Some people will go back to school, some will retire, some will work informally or start their own businesses.  It's a little glib just to say that people have given up.  And, of course, the very notion turns people against unemployment benefits, sold as they are on the idea that the unemployed aren't even trying.

    This is where Oxy and I don't see eye to eye, even though I love reading his stuff.  But I don't get the point of this piece.  Did I misread it?  Is the thesis that people who leave the workforce do it, by and large, because they can?  Is Oxy's cousin a metaphor for the non-working American population  Or is there a real hopelessness out there, a tragedy of new economic realities that leaves a great swath of the workforce unemployed, underemployed, and ultimately resigned?  I believe it's the latter.

    I am a Democrat who will spend more money and time on this race--again--than I can afford because I think the election of Mitt Romney would be a disaster.  And I understand that in politics we politic.  But I also submit that, when preaching to the converted, i.e. 95 percent of the folks at dag, there is no reason to put lipstick on a pig (the American economy).

    The American economy is in a shambles.  That doesn't mean, by any stretch of the imagination, that we shouldn't re-elect Barack Obama.   

    I thought that the point of this is that you can't generalize about the character of working people, or people on unemployment, in the glib way that we do when we discuss issues like labor force participation.  The mainstream media tends to dismiss this as "people getting frustrated and giving up hope."  Oxy's point is that every situation is unique.

    Understood des, there are of course anecdotes galore to highlight the uniqueness you refer to.  But the metric being challenged is just that, a metric.  And it's a metric (those leaving the workforce) that we have focused on for decades, and not just as a sensationalist data gotcha by the press, and certainly not to place a gotcha on Obama.

    Thanks, Destor, that was the point. I really try to keep my posts brief, but in this case should have set it up better---the unemployment situation in the country is truly awful.

    Bruce, sorry this post hit nerves not intended to. Seems I left out a transitional thought or two---little lesson in writing. Like you, I'm spending way over what I should to get Obama re-elected.

    I thought the 368 K number, which I realize is an inference from a sample to begin with, was being spun too negatively---in line with the general Rep. and media complicity to talk the economy down, that is talking animal spirits down, discouraging business owners, etc. I think for example, that the debt fiasco as an obstructionist tactic took some steam out of the economy last year.

    This WSJ "Real Time Economics" blog article notes that the number is also highly affected by the teenage group:

    among people of prime working age — which the Labor Department defines as those between 25 and 54 years old — the labor force declined by a more modest 66,000. The biggest workforce drops were among teenagers 16-19 years old (down 209,000) and 20-24 year-olds (down 218,000). The older workforce, those over 55, grew by 274,000, continuing a long-running trend.

    and goes into how complicated the teenage numbers can be depending upon things like the week of data collection (going back to school would mean dropping out of looking for work, and due to a quirk of the calendar data was collected a week later this year.)

    P.S. I, for one, don't see what's wrong in learning that this particular piece of data doesn't tell us much about the unemployment situation in this country with any sort of accuracy, unless you really delve into it and study it in detail. And I don't see anything defense-able about using these numbers inaccurately. I don't think you should have to apologize for pointing out that they need to be taken with a grain of salt, and for trying to figure out who and what they include, and don't think that doing that should be judged as having an agenda. Rather, it's when people are trying to fudge figures (as cmaukonen quoted, "torture them,")  rather than figure them out, is when one should look for an agenda.

    Speaking of, by happenstance, I came across Newt using them for an agenda (it's also kinda funny how he needs so many tweets to get his message across):

    So, you can tell Cousin Eddie that, according to Newt, he is helping Obama devil

    Ha! Very funny. I seldom have the edge with Eddie, so I can't wait to needle him with that one.

    Thanks, Artsy. 'Preciate' ya!

    At one point I was crunching numbers for a large company. We had about 50 subsidiaries. Each month they  submitted a forecast of the year's profit- a well substantiated number- plus a list of more subjective "hard" or "soft" spots:things that might occur to change that profit up or down.Each had a specific number attached.

    I accumulated them and calculated a number which was the net of the forecasts ,increased by the hard spots and decreased by the soft ones.Call it the "net- net".

    One month several subs improved their forecasted profit.But at the same time they added enough soft spots so that the net-net dropped from the prior month.

    I gave it to my boss who said "that's the wrong answer". By which he meant,not that I had added them up wrong, but that we knew that the overall situation had actually  improved not gotten worse.So we changed the net-net by encouraging some of the subs to eliminate some of the least likely soft spots.

    As I blogged elsewhere,it's intuitively obvious that a category  such as the number of discouraged workers changes gradually. As, I think , Emma showed an analysis of those not looking for work showed it was made up of various sub sets only some of which can be described as discouraged workers.

    For John King to say that the decrease from 8.3 to 8.l was due to an increase in discouraged workers was the wrong answer. 


    Thanks, Flavius. I think what Romney is saying to his campaign right now is that the polls are giving the "wrong answer". Indeed, in business Romney might have done the same thing as you to get the numbers he wanted. Unfortunately for him, the poll numbers right now can't be re-written.

    Latest Comments