* Editor's Note: The first 3 articles below discusses the unemployment rate and our lack of job creation, because it's related to the declining labor force. And the 4th article refers to the participation rate, which is followed up by some quotes I extracted from a new Fed study (along with my notes) on the Labor Force Participation Rate (LFPR).
(September 5, 2014) @FiveThirtyEight (by Ben Casselman) Don’t Blame Boomers For Unemployed Workers Leaving The Labor Force
* Editors Note: I have posts with similar complaints: White House: "Boomers Reason for Declining Work Force" and Fed Up with the Fed Blaming Boomers and Falsely Blaming Baby Boomers for Smaller Labor Force.
(September 5, 2014) @TruthOut (by Dean Baker) Employment growth continues to be less skewed toward older workers. Workers over age 55 accounted for 108.2 percent of total employment growth in the first four years of the recovery. By contrast, they accounted for just 29.4 percent of employment growth over the last year.
(September 5, 2014) @Associated Press (by Christopher S. Rugaber) The unemployment rate fell to 6.1 percent from 6.2 percent. But that was because more people without jobs stopped looking for one and were no longer counted as unemployed.
(September 5, 2014) @ZeroHedge (by Tyler Durden) Labor Participation Rate Drops To Lowest Since 1978; People Not In Labor Force Rise To Record 92.3 Million
* Editor's Note: ZeroHedge refers to a new Fed study about the Labor Force Participation Rate (LFPR). I excerpted a few paragraphs from their report below. I'll preface it with this: The Fed study seems to "hem-and-haw" a lot, with what appears to be a lot of guess work, assumptions, conjecture and surmising. In a nutshell, it emphasizes that half the decline in the LFPR since the onset of the recession in 2007 was due to retirees and those on disability; and that we should expect a further decline in the LFPR going forward — largely because of an aging work force (and not for a lack of jobs) — essentially implying that the decline in the labor force is mostly because of "structural" and not "cyclical" factors (In other words, to put it bluntly, the Fed report is mostly B.S.)
New Economic Propaganda from the Federal Reserve Board
(September 4, 2014) @Federal Reserve Board Labor Force Participation: Recent Developments and Future Prospects (Actual 90-page study here —> PDF)
PAGE 24 - "There has been an ongoing upward trend in participation rates for individuals 55 years and older."
PAGE 32 - "The leading-edge of the baby-boom generation reached age 62 (the minimum age to receive Social Security retirement benefits) in 2008, concomitantly with the onset of the recession. Thus, we would have expected an upswing in retirements to begin even absent the recession, which complicates the attempt to distinguish structural and cyclical factors ... On the one hand, staggering job losses during the recession and a subsequent lack of employment opportunities undoubtedly led some individuals to enter retirement sooner than planned. On the other hand, the financial crisis, with its associated losses in housing and stock market wealth, wreaked havoc on household balance sheets, likely causing some individuals to delay their retirement."
PAGE 33 - "Within-age retirement rates actually started declining around the late 1990s, likely due to a combination of institutional changes in social security and pension plans, increasing levels of education among older individuals, and longer lifespans. There is no obvious impact of the Great Recession and its aftermath on within-group retirement rates, and thus no clear evidence in favor of a dominant effect from either increased early retirements due to discouragement or deferred retirements due to lower-than-expected asset accumulation."
Editor's Note: Regarding "longer lifespans" --- @The Atlantic: Get Rich, Live Longer @ Forbes (2002) Why the Rich Live Longer; @ Forbes (2004) Why the Rich Live Longer; @ Forbes (2006) Why the Rich Live Longer
PAGE 34 - "Social Security retirements started to turn up during the recession. One possible interpretation of these patterns is that some individuals who lost their jobs began to collect Social Security retirement benefits during the recession (perhaps before their full retirement age) but nevertheless remained in the labor force to search for a new job."
PAGE 35 - "The increase in retirements and disability can account for a large portion of the rise since the recession in the share of individuals who are out of the labor market and don’t want a job. However, the available evidence suggests that these increases are primarily continuations of longer-term trends and so have largely been driven by structural influences."
Editor's Note: Regarding disability, the Fed can use the argument that "applications" have risen, in part, to explain a declining labor force — but despite what some political pundits have been claiming, actual "awards" have declined — and make up a very tiny increase of the decline in the labor force participation rate. See my posts: Report: Disability Claims and Awards Declined and 8.9 Million on Disability vs. 92.5 Million not in Labor Force. And yes, retirements contribute (about 1 million a year since 2008), (See my post: Record Number of Boomers Left the Labor Force). But high schools graduates far out-number them (over 3 million a year). See my post: Since Recession Ended, 11 Million more not in Work Force.
PAGE 45 - "Rates for prime-aged men have continued their long and gradual downward trend, joined relatively recently by prime-aged women, whose marked increase in participation ended around 1990. In contrast, participation rates for older persons have been rising since the mid-1990s."
PAGE 63/64 - "Increasing longevity and better health status, coupled with changes in social security rules and increased educational attainment, have contributed to an ongoing rise in the participation rates of older individuals, but these increases have not been large enough to provide much offset to the various downward influences on the aggregate participation rate."
Editor's Note: In conclusion, while Baby Boomers and older workers have contributed to the decline in the labor force, it has been MOSTLY laid-off prime-age workers and younger people who have first attempted to enter the labor force after graduating from school that make up the bulk of discouraged workers and the largest part of the decline in the labor force — not the small ratio of disabled older workers, or older laid-off workers, or older workers retiring. The reason: not enough jobs. Period. And with more offshoring of jobs, computers, automation and robotics, expect a further decline of the labor force (See my post: When Human Labor becomes Obsolete).
My Related Posts:
- Economic Propaganda and Wonkish Babble — Secular Stagnation?
- Retirees and the Declining Labor Force
- 2014 CBO Report on Labor Force—Debunked
- The Labor Force is Shrinking for Lack of Jobs
- BLS: Labor Force Projections to 2022
- CBO Wrong on Labor Force Participation Rate (LFPR)
- Labor Force Participation Rate - LFPR - Bud Meyers