Brian Beutler writes in Talking Points Memo on May 4, 2012:
“Among the new employment figures the Labor Department released Friday morning is an obscure one that’s ripe for politicking: the labor force participation rate. It measures the percentage of the population age 16 and above who are actually working. The labor force participation rate fell last month to 63.6 percent, its lowest level since 1981.”
“In the midst of an economic recovery — albeit a slow one — why would the labor participation rate continue to hover near four-decade lows?”
“If you take a long view of the figures, something becomes abundantly clear: there’s a lot more behind the country’s slumping labor force participation rate than today’s weak economy. The real reasons behind the fluctuations in the rate over the past several decades are fascinating, and they raise some of the biggest questions in the field of labor economics.”
After climbing steadily for decades U.S. labor force participation plateaued about a decade ago, and began falling.
Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s (the non-human factor) ever increasing role. Over the past century there has been an ever-accelerating shift to productive capital––which reflects tectonic shifts in the technologies of production.
Unfortunately, ever since the 1946 passage of the Full Employment Act, economists and politicians formulating national economic policy have beguiled us into believing that economic power is democratically distributed if we have full employment––thus the political focus on job creation and redistribution of wealth rather than on full production and broader capital ownership accumulation. This is manifested in the belief that labor work is the ONLY way to participate in production and earn income. Long ago that was once true because labor provided 95 percent of the input into the production of products and services. But today that is not true. Capital provides not less than 90 to 95 percent of the input. Full employment as the means to distribute income is not achievable. When capital workers (productive capital owners) replace labor workers (non-capital owners) as the principal suppliers of products and services, labor employment alone becomes inadequate. Thus, we are left with government policies that redistribute income in one form or another.
Binary economist Louis Kelso was quoted as saying, “Conventional wisdom says there is only one way to earn a living, and that’s to work. Conventional wisdom effectively treats capital (land, structures, machines, and the like) as though it were a kind of holy water that, sprinkled on or about labor, makes it more productive. Thus, if you have a thousand people working in a factory and you increase the design and power of the machinery so that one hundred men can now do what a thousand did before, conventional wisdom says, ‘Voila! The productivity of the labor has gone up 900 percent!’ I say ‘hogwash.’ All you’ve done is wipe out 90 percent of the jobs, and even the remaining ten percent are probably sitting around pushing buttons. What the economy needs is a way of legitimately getting capital ownership into the hands of the people who now don’t have it.”
The one sure way to close the “jobs gap” is to adopt the scenario where new economic growth is financed with mechanisms that extend pure insured capital credit to ALL citizens to acquire newly issued shares of stock in our major corporations and pay for their acquisition out of the future earnings generated by the new productive capital assets (non-human factor of production), and gain greater access to “real” job opportunities that a growth economy generates. And as this new economy takes form with the secondary benefit of creating “real” job opportunities, ALL citizens within a generation or so will have acquired a viable ownership stake in the future economy that will earn them income for the rest of their lives.
