Sunday, May 6, 2012

Milking the Middle Class

civilian_labor_force_participation.pngA lot of noise is being made lately about the Labor Force Participation Rate. Pretty much every graph starts in 1980, in order, I suppose, to illustrate that all the "gains" under Reagan-Clinton have been "erased" by Bush-Obama. The underlying assumption seems to be that the more people in the labor force, the better. I don't agree.

This graph goes back to 1948 and illustrates that the normal — and by normal I mean the way things were when I was a kid — labor participation rate is closer to 59%. Back then Dad worked and Mom stayed home and raised kids. After the Great Society programs kicked in Dad still had to work to support the family but more and more often Mom had to work too — to pay the taxes.

So a high labor participation rate is great if you're in the business of farming workers and harvesting taxes, but not so great if you just want have a life and raise a family.

Who are your working for anyway?