2010-07-02

Ratio of workers to population: an A-B-C correction?

Looks like a nice head and shoulders pattern. Also appears to be a possible Elliot Wave pattern there, but I'm not experienced enough to put a credible wave count on it.

That said, I'll take a shot at it. The chart looks like a possible A-B-C correction. but how can the ratio of workers to non-workers in the economy be possibly bottoming or near a bottom (assuming its in wave C)? This is a chart of civilian employment to population, whereas unemployment is calculated in part based on the number of people looking for jobs. If the government ends up cutting welfare and entitlements, many people will look for work to make up the difference. If only some of them find jobs, this graph would move higher, but the unemployment rate would also move higher.

If government workers are fired, this graph could decline, but that would not be bad news for the government's ability to pay its debt. That's about the only scenario where a continued decline in this line would be anything but absolutely disastrous.

Also notice that the current ratio is near where it was there will still many single-income families, before feminism starting sending women into the workforce. During the huge climb from the 1970s to 2000 is when wages stagnated for many men, an econ 101 example of supply versus demand.

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