"People Are Leaving the Workforce in Droves."

[EdithKeeler]

OK, I don't agree with quite a few things in this piece, and he assumes, essentially, that anyone who is not working is a "taker," and I don't think that's necessarily a correct assumption, but... whatever.
http://smallbusiness.yahoo.com/advisor/ ... 00458.html

But whenever I see these articles, I always think of my old "root cause analysis." Why are people making the decision not to work? Yes, many of them don't have the skills and education for the jobs of today--the structural unemployment we hear so much about.

At the same time, there are a lot of people choosing not to work for other reasons. I, personally, know quite a few educated women who've made the choice not to work outside the home while they raise their kids. I know quite a few people who've retired or semi-retired early, choosing to significantly downsize their lifestyle so they don't have to do the 9-5 grind (really 7-7 grind in a lot of cases...). I do know a few people who've decided that for the small amount of money they can make given their skill set and available jobs, they might as well not work. Yes, some of these people may get some public assistance (ie, "takers") but that's not the point of this post. I also know a handful of people who do work... but under the radar, not for employers, but they may not be paying taxes on what they earn. Not necessarily selling dope or something, but working as contractors, often, and not reporting their earnings. (When I say I "know" these people, some I do know personally, others I encounter through my work, where I am privy to a lot of details about their employment or lack thereof, whether or not they pay taxes, etc.).

Here's my long-winded point: while so many people seem to bemoan the employment situation, no one seems to be looking at the underlying reasons why someone would CHOOSE not to work. Being required to work too many hours? Being required to spend a lot of time on pointless BS that is outside your area of interest or really even what you're technically employed to do? Arcane work rules about when you have to show up, what you have to wear? Being told how you're supposed to act, even what causes to give to? Being given crazy work schedules where you don't know which days/hours you're supposed to work? And... lots of other things--we could all make really long lists.

What set me off about this piece was this sentence: "Still, there is more reason for pessimism than optimism in the numbers, particularly since they reflect a lack of labor ethic that is not usually associated with being American. " The assumption being , of course, that people aren't working because they're lazy, not because our whole system of employment is, in a lot of ways, broken.

[GandK]

This is also coinciding with the normal retirement of the Baby Boomers. I wonder how much that's affecting the statistics.

[dot_com_vet]

I hear boomers regularly discuss ER. There is a lot of discussion, but most are still working!

I did meet someone (middle aged) who is going to ER out of the blue last week. Completely unexpected. There could be truth to the article, especially now that health care isn't a big unknown.

[Sclass]

Interesting article. I'm surprised so many people have the ability to unplug.

Brings up a lot of thoughts.

I have many professional friends living month to month who wish they could unplug but cannot. Does this make them unwilling participants? I don't go there with them because I want to stay friends.

Has working become that bad? I hope not. Thought it was only me .

Or have the unemployable given up?

The article implies the tax burden on the existing makers will only get worse which means...oh no, positive feedback. I must say the employment taxes have discouraged me from hanging up a sign on my door as a consultant. I've turned down several gigs because I didn't want the paperwork.

[jacob]

It's the middle class going away.
http://earlyretirementextreme.com/what- ... class.html
http://earlyretirementextreme.com/why-i ... class.html
http://earlyretirementextreme.com/the-d ... class.html

1) Boomers naturally retiring following their market crash-induced delay; the market has recovered. This doesn't remove the secular demographic threat to asset values.
2) The increasing split between the have-nots and the have-yachts (savers vs spenders).
3) The US peaking as an empire---despite what Warren Buffet says. (Think about it. Which countries can the US invade that it hasn't already. There are how many military bases around the world? Rephrase: How can an even greater flow resources be diverted towards the US and why should they when they can be turned into goods more profitably elsewhere?)
4) Technology furthering the split between the savvy and the button-pushers. (This is the distribution problem.)
5) People figuring out that they can live quite well without having to spend $30000/year. This wave is particularly coming from Gen-Y who just continue their college lifestyle.

[vivacious]

@Jacob not 100% sure I follow you re: your #1 point. So what is the secular demographic threat? You mean a sudden switch from people investing to drawing down their accounts, cooling the market as money comes out of it? Is that what you're getting at?

[jacob]

@vivacious - Yes, that. Harry Browne wrote a book about it. When you think about it, the ebb and flow of index investing (or the riff raff aggregately investing in mutual funds---same thing) comes down to demographics.

http://earlyretirementextreme.com/the-m ... sting.html

[Sclass]

Jacob,

Pretty dark stuff in your three blog posts. But I got my answer.

I have so many friends living this miserable consumerist conformist life. They tell themselves lies to keep going but occasionally fly into a rage over their situation especially when the truth catches up. I'm usually the object of the rage having "gamed" the game. So I don't go there.

I was hoping this wasnt slavery. how depressing.

I think I'll post something positive in DIY about how I patched my linoleum (not hardwood!) floor with automotive bondo and sand.

[workathome]

It is a matter of importance that many would rather have a comfortable debt-slavery existence than the physical "hardship" associated with an ERE-lifestyle. The key is the slave is in a victim role and doesn't have any control when the comforts disappear.

Even though the disappearance of the middle-class makes logical sense, I have trouble actually envisioning or imagining it and what America will be like. Will the current middle class still have an even lower "lower class" to hire to cook them meals, mow their lawns, etc.? Or will they eventually be in direct competition for servicing the rich with lawn-mowing services and government aid?

Edit: bad example, looks like robots will be doing the lawn mowing

[Tyler9000]

It is a matter of importance that many would rather have a comfortable debt-slavery existence than the physical "hardship" associated with an ERE-lifestyle. The key is the slave is in a victim role and doesn't have any control when the comforts disappear.

+1 Regret is an underrated fear.

[Felix]

I don't think people just choose not to work. It's just that the quantity and quality of jobs is in decay with some of the "takers" unwilling or unable to hire new "makers". Explaining a sluggish economy still recovering from a recession with an unwillingness to work just feels like it's aimed in the wrong direction. Also, you have an aging population and people are "takers" 2/3 of their lives anyway.

[GandK]

I don't think people just choose not to work. It's just that the quantity and quality of jobs is in decay with some of the "takers" unwilling or unable to hire new "makers".

I think some people do choose not to work BECAUSE the quantity/quality of jobs is in decay. The (3) people I know who have been out of work for an extended period of time are people whose cheese has been moved and they're in denial. They want a job that pays what the old job payed and for similar work. That ain't happening (specific reasons: the manufacturing facility went away, the company was bought out, and technology changed). Rather than adapt, they're jumping up and down YEARS LATER about how there are no jobs available.

[jennypenny]

Also, you have an aging population and people are "takers" 2/3 of their lives anyway.

Do you consider ERE's takers?

[Felix]

I don't find it all that unreasonable to want a similar job at similar pay. Wages haven't risen with inflation for 40 years anyway. It's a systemic matter in my view and I take an issue with the lazyness-framing implied by the article. I'm not even sure that there are enough minimum wage jobs available to employ all victims of the banking crash even though I'm sure there could be. I do not think this is a decent solution, either. Unpaid internships seem to be the main offer for millennials out of college.

Are ERE's takers? By the definition in the article as people without formal paid employment, yes. Personally, it gets a partial yes from me, as there often is an aspect of out-of-system production involved in the emergent renaissance ecology definition.

[Tyler9000]

Do you consider ERE's takers?

IMHO, "makers" and "takers" are simply terms for opposite sides of the predominant success spectrum measured in dollars. Makers are net wealth producers, while takers are net wealth consumers. In that sense, I see my personal ERE goal as living "wealth-neutral". I desire to be neither a maker fixated on productivity nor a taker dependent on others. Instead, I seek my happiness and self worth on one or more orthogonal vectors.

To the extent I may benefit from distributions such as health care subsidies by living a comparatively "less wealthy" lifestyle on the sliding scale, I believe my substantial investments in the productivity of others covers my fair share of fiscal social responsibility. For the most part I desire to be self sufficient, leaving the makers and takers to balance their own equation.

[Seneca]

I don't find it all that unreasonable to want a similar job at similar pay...

How can it not be perfectly unreasonable for the job market to become static if we want society to progress?

[Felix]

People do not exist for the job market.
Widespread unemployment and loss of income is no sign of societal progress.
Nobody is arguing for a perfectly static labor market to begin with.

[Seneca]

People do not exist for the job market.
Widespread unemployment and loss of income is no sign of societal progress.

I did not mention or imply these. Progress can be change to any person's definition, it could be that we refuse to emit more than X trillion tons of CO2 into the atmosphere/yr, and still, the labor force would have to change.

Nobody is arguing for a perfectly static labor market to begin with.

It seems to me that you are.

Farming jobs changed/reduced, during the Industrial Revolution. The mechanization of farming necessarily meant less jobs were available in farming provided there wsan't sufficient demand to keep up with the production efficiency increases.

Today the United States has significnatly higher industrial output than we did 40 years ago, yet the industry employs far fewer people.

http://mercatus.org/publication/us-manu ... -jobs-1975

Sorry to industrial workers, but the number of jobs is going down, so not everyone can expect same pay and same job unless we increase industrial output enough to employ all those people at today's productivity (though of course, even that's not possible, we need different skills in industry now, and it would not be desirable from a resource perspective either). OR, the market is static and they're not allowed to become better at manufacturing.

Creative destruction is just that. And it means churn in the job market.

[Felix]

It appears that industrial production is merely outsourced to countries with lower working standards.

With automation, though, yes over the next decades, the workforce required for industrial production will go down. The job market is churning. (which is why I like a strong safety net for these people)

But note that I said similar, not same. A rise in productivity need not coincide with a loss in living standards. Distribution of income is a highly politicized subject on this forum.

[Seneca]

But note that I said similar, not same. A rise in productivity need not coincide with a loss in living standards. Distribution of income is a highly politicized subject on this forum.

We agree, I'd be against productivity if it didn't have it's good points! Though maybe do not in how to distribute the fruits of the productivity.

But even if you took highly politicized pay portion off the table, the skills/jobs aren't going to be even remotely similar. A subsistence farmer has nothing in common with screwing lug nuts on Model T's, which has nothing in common with programming a CNC mill, which has nothing in common with running Facebook.