We blame the Islamic Arab world – and in particular the
Kingdom of Saudi Arabia – for denying a good part of its population, the women,
an equal role in building the future of their countries and we wonder how in
this day and age a nation can prosper if it leaves a large percentage of its
population on the sideline.
The answer is more likely than not that it cannot prosper
under those conditions. It can stay afloat for a while, particularly if the
nation is a hydrocarbon rich country that can generate wealth by exploiting its
natural resources. But it is unlikely that it can reach its full potential if
not the whole population is engaged in the nations building process.
In the USA we don’t have that problem. Or do we?
Warren Buffett just recently made a case* for women to
shatter what- he believes- are mostly self-imposed limitations on themselves.
He blames these limitations on lingering after effects of centuries of
institutional inequality between men and women. There is more than symbolism in
the fact that our Declaration of Independence declares “all men are created equal”.
Warren Buffet writes: “The closer that America comes to
fully employing the talents of its citizens, the greater its output of goods
and services will be.”
Arguably, the contribution of women in our society can be
enhanced by removing any and all remaining vestiges of a time we should finally
leave behind. This is particularly the case with women’s opportunities at the
top levels of business and government, where women remain significantly
underrepresented in spite of great progress over the last decades. But there is
a whole other segment of our population that we should focus on if we believe
that “running on all cylinders” is a prerequisite for success in the race to
the top of nations. And this segment is by and large equally divided between
men and women.
First of all, we need to realize that nobody counts the
number of people employed in the USA. The Federal government through the
Department of Labor makes an effort (not very successful) to measure the
unemployment rate, but what would be really interesting to know is the number
of people who are employed (and by deduction, the number of people who are left
out of the labor process).
Isn’t it somewhat befuddling that our government cannot tell
us what percentage of the population is engaged in the labor process? And, therewith,
the percentage of the population that is not?
The Bureau of Labor Statistics measures a metric that it
calls the “Labor Participation Rate”, which stood in April of 2013 at 63.3%.
This statistic measures the number of people in the labor force that is either
working or actively looking for a job as a percentage of the civilian
population aged 16 and older.
It also measures a metric that it calls the
“Employment-Population Ratio”, which stood in April of 2013 at 58.6%. This
statistic measures the proportion of the
civilian noninstitutional population aged 16 years and over that is employed.
It includes people who are under-employed in terms of the time they get paid
for or in terms of the level of work they are asked to perform.
Thus it appears that also
in our country close to half of the population is left out of the labor
process. Some percentage of this “unengaged” population is either below working
age, retired with no intent to get re-engaged or studying full time.
The bottom-line is that the
Federal Government cannot tell us with any degree of precision what percentage
of the work-eligible and work-capable population is actually disengaged from
the labor process and thus not participating in the growth of our economy and
the strengthening of our nation. But we can come at it from another angle:
We know from the Census
that the USA has a population of about 314 million, that about 74 million are
below age 18 and about 42 million are over the age of 65. Since some unknown
percentage of these age-groups are employed (let’s assume 10% of this populus),
it follows that our labor pool would be approximately 210 million.
We know that in April of
2013 we had
·
11.7 million unemployed
·
14 million on disability (a staggering number!)
·
2.3 million in prison (a staggering number!)
·
7.6 million involuntary Part Time
·
2.3 million marginally attached
These 5 categories add up to 37.9 million people in the USA
that would theoretically qualify for the workforce but are either unemployed or
underemployed. That represents 18% of the labor pool. Arguably, this number is
a more accurate measurement of disengagement of the labor process than the
unemployment rate of 7.5%.
Warren Buffet, in his interview in Fortune, states: “No
manager operates his or her plants at 80% efficiency when steps could be taken
that would increase output”. We point the finger at the Islamic Arab world for
running their nations at 50% efficiency by denying women the right to
participate. But we should not be blind to the fact that we run America at much
less than 100% of its horse-power.
If America wants to stay on top in the race of nations, it
will have to find a way to run on all cylinders and get a much larger part of
the labor pool, men and women, engaged in supporting its economic growth and
development.
*In the May 20 issue of Fortune
