“If it makes sense to assume that acute disasters are likely to occur in great numbers, not because nature has become more malevolent but because men have learned so many ways to create their own havoc; and if it makes sense to assume that the processes of modernization often breed their own forms of chronic disaster; then it is reasonable to wonder whether traumatization is apt to become an increasingly common experience in human life.”
Kai T. Erikson, Everything in its Path, New York: Simon and Schuster, 1976, p. 256.
Employment is the most important source of entitlement to income in the world economy for people who do not own capital or rental properties. It has very high social legitimacy and the majority of working age adults rely on employment for income. Thus, changes in patterns and levels of employment have consequences for the rights to income the world’s people enjoy.
World Labor Force Participation in Decline
Between 1980, the world’s population of potential working people, ages 20 to 64, increased from 48.8% to 57.6% of the world’s population. Job creation did not keep pace.
As the chart above shows, the rate of labor force participation for people ages 15 to 64 has been slowly declining and is expected to continue to decline through the year 2020. The participation rate increased to its maximum of 75.9% in 1990. It is expected to slowly decline to 75.4% in 2020.
Employment Opportunities for Youth Deteriorating
The largest decline is in the age group 15 to 24, although some of this decline may be attributable to increasing numbers of the world’s teens going to school. Perhaps more importantly, for workers in the age group for establishing careers and starting families, 25 – 34, the labor force participation is declined, from a high of 78.3% in 1988 and 1989 to 75.1% in 2008. Going forward into 2020, the rate is projected to vary between 75.0% and 75.2%.
Damaging Impact on Entitlements to Income
With the creation of jobs in the world economy not keeping pace with additions to the working age population, more and more of the world’s people have become dependent on weaker forms of income entitlement.
Employee is only one of a number of statuses that bestow an entitlement to income. Other statuses to which an income entitlement is usually assigned include: child, person with a disability, person who is unemployed but not by choice, working person living on poverty wages, elderly person.
While these statuses bestow income entitlements, they are weaker forms of entitlement because these statuses generally have lower social standing than does being employed. A prisoner is assigned an entitlement to income, but it is virtually devoid of social legitimacy.
Declining labor force participation is also weakening rights to income in another way: increasing competition for jobs has been shifting bargaining power to employers. Employers have been using this increased power to weaken unions, reduce wages and benefits, and replace higher wage workers with lower wage workers.
This shift in income entitlements has done considerable damage to the world economy and the world’s communities. Damaging consequences include:
- The world’s purchasing power growth has not kept up with the growth of productive capacity,
- In the intensifying fight for survival, businesses have been relentlessly cutting their workforces, moving even more of the world’s working people from employment based income entitlements to weaker forms of entitlement,
- The world’s productive wealth has become even more concentrated in the hands of a few, limiting opportunities for young entrepreneurs to become successful in the world of business
- The income and wealth gaps between the richest and the poorest of the world’s people has widened,
- Unemployed and underemployed young working people have become more easily recruited into social activities that are self-destructive and into political movements that have little more purpose than to wreak havoc on the society that has denied them opportunities to share in the wealth.