Labor force participation rate in the USA will fall to 59% by 2025-2030. Revision of the 2013 prediction

 Seven years we presented a description of secular fall in the labor force participation rate, LFPR, measured by the Bureau of Labor Statistics (see original prediction in Figure 1). The LFPR (the portion of people in the labor force) for the working-age population (16 years of age and over) has been on a long-term decline since 1995. We predicted the fall down to 59% by 2025. The series of events in 2020 dramatically affected the labor force market in the USA and show that the overall evolution of the LFPR to the predicted level is still accurate. Between 2014 and 2019, the LFPR was hovering around 63% and slightly deviated from the predicted trajectory. Such deviations are not stable, however, and also were observed in the past. The long-term LFPR behavior is close to a sin(t) function. This might be an expression of the oscillating natural process driving the LFPR evolution as described by Russian economist Kondratiev, who introduced long-period (50 to 60 years) waves in economic evolution – see Figure 2. Following Kondratiev, we interpolated the observed LFPR curve by a sinus function with a period of ~70 years. In Figure 3, we added ~50 LFPR readings published since 2016 and show the most recent portion of the curve in Figure 4.

New data fit the predicted curve and allow to make some predictions.  We see that the bottom of the model function is expected in 2030 and the rate is 58.5%. We also observe the development of a new short-term level in the LFPR is expected near 61.5 %. The drop in the LFPR is an irreversible and economic activity in the USA is near the lowermost level. This does not mean, however, that international financial domination of the USA will not feed the US stock market and budget with money. The drop in the LFPR just means that the US labor market is on the degradation trajectory - more and more people will lose jobs before 2030. Actual recovery is possible only after 2040. It is not excluded that the next 20 years is the era of the US (more likely international) financial institutions.

Figure 1. Original prediction of the LFPR evolution in the USA made in the earlier 2010s. The long-term behavior is close to a sin function. This is an expression of the oscillating natural process in the background  of LFPR evolution.

Figure 2. The Kondratiev wave

 

Figure 3. Same as in Figure 1 with 50+ new readings since 2016. The drop in 2020 moves the observation curve down to the predicted one with a weak rebound in the second half of 2020.

Figure 4. The actual LFPR curve (red) and that predicted by sin function since 2000. Development of a new level in the LFPR is expected near 61.5 %.

New labor data indicate that there is no sign of fast economic recovery any time soon

 

1. Good news - the number of unemployed seems to fall and ( with some deceleration ) may reach the pre-crisis level. The number of unemployed may drop when people get jobs or when they leave the labor force, however. 

2. Another good news - the number of employed increases (also with deceleration).  Here we have to retain in mind the permanently (linear) growing working-age population. It increases at a rate of ~2,280,000 per year (between 2010 and 2020). One has to subtract approximately 1,000,000 (population times employment rate)  from the current employment level in the below figure in order to compensate for the expected change in the number of employed. Therefore, the total  increase from 133,400,000 in April to 149,732,000 in November has to be 15.4M instead of 16.4M.

3. The labor force participation rate hovers around 61.5% since June. This is not good news. Considering the potential economic growth there is no prospective - the employed and unemployed population left the labor force and there is no sign of recovery to the pre-crisis level any time soon.

Plague in Vienna , now COVID-19

There is a plague memorial just in the center of Graben - the center of Vienna. It has to remind everyone about the losses 350 years ago. Judging by the behavior of Vienneses and visitors, it does not. The COVID-19 pandemic was considered with a laugh by the younger population and immobilizing fear by political authorities. The former practically ignored social distancing and the latter are still dead scared of any decision - they want to fly between droplets of heavy rain. It does not work, as expected (European politicians is a very specific type of psychic anomaly). The largest number of new COVID-19 cases per day (at the testing rate is about half of that in the USA, UK, and Russia) was ~9,500. When scaled to the US population (330/9 =6.67), this rate is 350,000 per day. This is much much higher than the pick value in the USA. 

Why Organization for Security and Cooperation in Europe is fading away

 The OSCE is an example opposite to the UNSC. It does not have a veto agreement and many punish minorities. According to the OSCE, the US (the OSCE State Signatory)  elections do not show any problem as such. Frauds and massive manipulation do not affect the OSCE approach to other countries. 

The uneven approach makes the essence of the OSCE void and the organization deserves to be dismissed. I am sure nobody will remember it in a few days after it disappears. Even the current staff memebers. 

Macron said that the UN Security Council “is not making any useful decisions at the moment”.

 This statement is the best confirmation that the UN Security Council still\ is the best remedy from one-sided solutions leading to a big war. Macron wants "useful decisions" how he understands the usefulness for France and the EU. It is fully understandable that the President of a country must care about their own needs and problems. At the same time, if one country finds UNSC decisions as useful there are many others who might suffer. The creation of the SC was aimed at the impossibility of one-sided decisions. And it still works. The reason for such a strict rule is obvious - nobody has it right. The change is domestic and foreign policy among the UN countries has many dramatic moments since the SC creation. No country can claim that all problems are resolved now and forever (e.g. the 2020 US elections is a good example revealing structural faults in the US social/economic/racial/gender system). To retain this world as safe as possible the UNSC is needed now much more when during the cold war. The UNSC makes the most useful decision right now - it does not give any chance to fall in WWIII. I am sure that when Macron or any other top leader says that the UNSC is making useful decisions we will have thousands of missiles with nuclear warheads flying to make such decisions less useful for the speaker. 

European cities are not safe any more

 I reside in Vienna for the last 20 years with some gaps. The scene of the last attack in November is just at a gunshot distance from my place. I am scared and news from other European countries just makes my feelings suffer more. European cities are not safe because of the authorities' mistakes and crimes. We need a  safer environment to live and work.  

The US weakness is finally clear - the absence of order

 There is one clear feature of the US election which reveals the fundamental weakness of the social organization - disorder. The self-organization of free people was the cornerstone of the USA as a country. The conservative population as a founding nation was strongly connected to the wisdom of the previous generations in the assessment of the needs and dreams.  This nation was very inertial in the change of modus vivendi (200+ years of the same Constitution!) and thus strong in decisions at all levels and the capabilities to make dreams real (I admire engineering skills). The current era of the Internet made a big difference in the manipulation of the social wisdom pertaining to conservative minds. People lost orientation when meeting opposite opinions in the chaotic stream of the full spectrum of ideas and examples. The US society is now highly disordered and allows massif open and hidden manipulations in all aspects of life (e.g. subprime mortgage!). The society lost basic conservative values (Haidt) - respect of authority and loyalty  (i.e. order - I still wonder how they think the police will be working in a liberal world). For those who have some claims to the USA now in the best time to support Biden and Co and increase/deepen the disorder along all possible weak lines - power impotence with  COVID-19,  dissolving businesses, BLM (I wrote a few papers on race and gender disparity in income distribution and recommend Alstone commission report ), Sanders socialistic transformations (I fully support no student loans and higher taxes as the fairness of proportionality),  etc. The list is endless. Americans deserve to know all things at once.