Thursday, December 26, 2013

BLS: Labor Force Projections to 2022


The labor force participation rate will continue to fall...


Not enough jobs now, less by 2022!

Since 1948 the labor force participation rate has trended upward until the late 1990s, when it peaked at an all-time high of 67.1 --- but it has since declined --- and will continue to decline.

It held steady at about 66.0 percent from 2004 to 2008. Subsequently, the overall labor force participation rate fell from 66.0 percent to 65.4 percent in 2009. Then, in 2010, the rate came in at 64.7 percent.

By 2012, the participation rate had fallen to 63.7 percent.

Currently it's at around 63%.

Labor Force Participation Rate 1948 to 2013
Source: BLS - http://data.bls.gov/timeseries/LNS11300000

A combination of demographic, structural, and cyclical factors has affected the overall labor force participation rate. In a December 2013 (16-page) report, the BLS projects that, as has been the case for the last 10 years or so, these factors will exert downward pressure on the overall labor force participation rate over the 2012–2022 period and the rate will gradually decline further, to 61.6 percent in 2022. (My previous post: Fed Expects Further Decline in Labor Force))

The BLS says that, because of the decreasing labor force participation rate of youths and the prime age group, the overall labor force participation rate is expected to decline. (My precious post: Discouraged Workers, not Disabled, Shrinking the Labor Force

The BLS also says, the participation rates of older workers are also projected to increase, but remain significantly lower than those of the prime age group. (My previous post: Falsely Blaming Baby Boomers for Smaller Labor Force)

A combination of a slower growth of the civilian noninstitutional population and falling participation rates will lower labor force growth to a projected 0.5 percent annually.

Today, the U.S. labor market is experiencing a negative demographic effect in which a large segment of the population is moving from an age group with higher participation rates to an older age group with lower participation rates, resulting in a slowdown in the growth of the labor force.

In addition, the so-called baby bust, people born between 1965 and 1975, is reinforcing this slowdown, because fewer people are in the high-participation prime age group.

Over the 2012–2022 timeframe, the U.S. population is expected to grow at a slower rate than it did in the previous decade and the labor force participation rate is projected to decrease from its 2012 level. Both factors indicate a slowdown of labor force growth during the 2012–2022 decade.

The labor force was 155.0 million in 2012. Over the next 10 years, the BLS expects that the workforce will increase by about 8.5 million, to reach 163.5 million in 2022. The civilian noninstitutional population was 243.3 million in 2012 and is projected to be 265.3 million in 2022, an increase of about 22 million.

The labor force is projected to increase by 8.5 million during the 2012–2022 timeframe. BLS projects that, between 2012 and 2022, 35.4 million workers will enter the labor force and nearly 27.0 million will leave.

The U.S. population is aging --- but both the U.S. population and its labor force are relatively younger than the populations and labor forces of the other industrialized countries, mainly because of the high numbers of immigrants entering the United States, who are mostly in younger age groups, and their entry into the U.S. workforce decreases its median age.

In 2012, for every 100 individuals in the labor force, 102 were not. Of those:

  • 42 were children
  • 37 were 16 to 64 years of age
  • 23 were 65 years and older.

The ratio is expected to rise, from 102-per-100 individuals in the labor force to 107-per-100 by 2022 (8 years from now).

BLS projects that the U.S. labor force in 2022 will be 163.5 million, an increase of 8.5 million over the 2012 level. The downward pressure on the overall labor force participation rate is expected to continue over the 2012–2022 period, and the rate will gradually decline, to 61.6 percent in 2022.

2 comments:

  1. Ralph Nader's Letter to Boeing’s Boss: Squeezing workers for corporate welfare

    www.nader.org/2013/12/26/letter-boeings-boss-squeezing-workers-corporate-welfare

    10 Reasons That Long-Term Unemployment Is a National Catastrophe

    http://www.motherjones.com/kevin-drum/2013/12/10-reasons-long-term-unemployment-national-catastrophe

    Without Manufacturing, We’re Doomed

    http://www.theamericanconservative.com/dreher/without-manufacturing-were-doomed/

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  2. Paul Krugman --- The Fear Economy

    http://www.nytimes.com/2013/12/27/opinion/krugman-the-fear-economy.html?_r=0

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