Saturday, February 1, 2014

Boomers, the Economy and Jobs in 2014

Boomers haven't been shuffling off into retirement. They are either unemployed (because no one will hire them) — or if they weren't laid off, they are working longer. Some went on disability, and some were forced to take an early Social Security at age 62.

But what about the reason for the low labor force participation rate that the Feds can't seem to agree on? Some say it's because Boomers are retiring, some say it's because prime working-aged adults can't find jobs, and some say it's because middle-aged people are going on disability (Even though the labor force participation rate has been in decline since 2000.) So who should we believe?

New York Times: "Financially struggling boomers fill many of the jobs that young people once assumed would be theirs. And according to a recent poll, nearly half of workers 50 and older expect to retire later than they had previously thought. According to a recent poll, nearly half of workers 50 and older expect to retire later than they had previously thought."

OMG !!! From the New York Times: "Many global investors are concerned that the Fed’s pullback in its bond purchases will raise interest rates and cause investors to shift money out of emerging markets and into the United States for higher returns."

Does that mean that job creators in the U.S. will have to start actually creating jobs? Here's Obama's plan for hiring long-term unemployed middle-aged Americans.

Also from the New York Times:

"The latest economic growth report, released on Thursday...does not inspire confidence in business investment, which has been sub-par for some time, to spur the economy...At bottom, the economy is where it has been before in the recovery that began...The drivers of the growth look shaky and, in any event, are still too weak to translate into more good jobs, higher pay and a better life for most Americans. Nor is there any guarantee that the benefits of stronger growth, when and if it materializes, will be broadly shared; to date, what growth there has been has largely benefited those at the top of the income and wealth ladder, a dynamic that becomes more entrenched the longer it endures. Congress could help, with government spending, labor reforms and other policies to support job creation and higher wages and, by extension, consumption and investment. But legislative solutions are not in the cards."

Paul Krugman:

"Why not extend the power of the Bowles-Simpson brand [austerity and budget cuts] beyond mere deficit scolding to other policy areas? What about a Bowles-Simpson commission for everyday life decisions? The husband says we should spend $5,000 to repair our car, the wife says we can’t afford it. Then they hire a Bowles-Simpson commission to tell them they should reject that debate and instead ride around on an invisible unicorn. [The Bowles-Simpson commission] completely failed to solve the problem they were supposedly addressing, but were quite effective at worsening the policy response to the real problems they chose to ignore."

The good news is: The Republicans (after 5 long years) have finally came up with a jobs plan —The Save American workers Act (all of 2 pages long, not counting the congressional credits), and it says:

"To amend the Internal Revenue Code of 1986 to repeal the 30-hour threshold for classification as a full-time employee for purposes of the employer mandate in the Patient Protection and Affordable Care Act and replace it with 40 hours."

New York Times (again):  "Target has announced that it will no longer provide health insurance for part-time workers but will send them instead to the new health care exchanges established by the Affordable Care Act. Will Target raise wages to make up for the loss of the company contribution?" ---- "Target is easing their [part-time employees'] transition [into the healthcare exchange] by making a one-time cash payment of $500 to workers who are currently enrolled [in Target's healthcare plan]. Target says it will not reduce the hours of full-time workers in an effort to send more of them to the exchanges."

I predict that the economy and jobs for 2014 will be the same as it was for 2013, 2012, 2011, 2010, 2009 and 2008 ---- the rich will get richer as the poor get poorer.

As for the Boomers, how will they fair in 2014? As my dad used to say, "Better than some, worse than others." Although, a few more might shuffle off into retirement.

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