Not Working and Dependent

"From East Egg, then, came the Chester Beckers and the Leeches, and a man named Bunsen, whom I knew from Yale, and Docter Webster Civet, who was drowned last summer up in Maine."
--Nick Carraway (The Great Gatsby)

With headline unemployment numbers at decade lows, one would think we would be enjoying a period of prosperity that we haven't experienced in some time. However, when you look under the hood of the jobs numbers, there are several eyebrow raisers.

An important one is the labor force participation rate, which as been been marking multi-decade lows for years. This means that less able bodied people are actually working as a fraction of the total.

How do people who are not working get by? Some may be living off past savings (either their own or perhaps inherited). Given our low saving rate, the number of people in this group is likely low.

Others may have retired early due to rich pension plans. Instead of drawing from past saving, early retirees draw income from the production of others to fund their lifestyles. Stated differently, early retirement involves people with productive capacity are sitting it out in favor of living off the backs of others.

Still others, as noted by Dan Mitchell, are on simply on the government dole. They are not working because can live off the welfare state.

Early retirement and the welfare state create conditions of dependence, They leech productivity, and perhaps even morality, from economic systems, thereby hindering prosperity.