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Labor Force Participation Rate Isn't Falling Because of Retiring Baby Boomers


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2015 May 10, 2:46pm   10,265 views  25 comments

by smaulgld   ➕follow (4)   💰tip   ignore  

The labor force participation rate is falling overall because the rate among those 25-54 is falling while the rate among aging boomers is actually rising.

https://smaulgld.com/why-the-labor-force-participation-rate-is-dropping/


http://www.youtube.com/watch?v=wol2dDfy7UA

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1   bob2356   2015 May 10, 4:55pm  

Where are the 55 to 64 year olds? The current 35-50 group has 20 million less people than the 50-65 group or the 20-35 group. The high unemployment in that big bulge of 20-35 year olds that is no longer offset (or won't be in 4 more years) by the high employment 50-65 boomers who are rapidly moving over the 54 number.

There are certainly other factors, but boomer demographics is a big one.

2   smaulgld   2015 May 10, 5:01pm  

bob2356 says

There are certainly other factors, but boomer demographics is a big one.

Actually it's not-it is just a smoke screen/false internet meme. Younger boomers rate of participation in the labor force has also RISEN since the end of the great recession.
The real weakness in the job maket is AT THE HEART of it- in the 25-54 year old age bracket

THEY are the ones leaving the labor force in large numbers.

Here is the chart or 55+

The economy is bad-boomers are working longer or coming out of retirement because they cant retire on social security OR they cant retire on saving that pay no interest

3   bob2356   2015 May 10, 7:53pm  

smaulgld says

Younger boomers rate of participation in the labor force has also RISEN since the end of the great recession.

The real weakness in the job maket is AT THE HEART of it- in the 25-54 year old age bracket

THEY are the ones leaving the labor force in large numbers.

That's not the point. The population is actually decreasing in the 40-54 cohort while increasing in the 24-40 cohort. The lower end has always had much lower employment. They aren't leaving the labor force, they are entering it with mixed results. The younger boomers are moving into the 55+ cohort while at the highest employment parts of their lives. The very leading edge of the boomers is just retiring now.

The 65+ labor force is tiny, 5 million. It doesn't take changes in a big percentage of the population to make big changes in the rate. 55-64 is 25 million and 25-54 is 100 million.

http://www.bls.gov/emp/ep_table_304.htm
Look across the years. There is that -3 to -4 million hole creeping through the 25-54 cohort decade by decade. It's shifting from the highest unemployment group to the lowest. Under 35 always has less people participating. People still in or returning to school, frequent job changes, living with mom, whatever it's a fact of life. That moving hole shifts the participation rate right along with it. Look at 20 years ago, the 25 to 34 group took a huge hit while the 45-54 had a huge gain. The first group has high unemployment but low numbers, the second group has high employment and large numbers driving the participation rate up. Now that is reversing. In the last 10 years 24-54 lost .5 million net while 55+ picked up 11 million. Those were the higher employment workers shifting groups with a big hole behind them.

The whole shift in participation is only 2%, it doesn't take huge numbers to shift it 2%.

4   smaulgld   2015 May 11, 4:45am  

bob2356 says

The lower end has always had much lower employment. They aren't leaving the labor force, they are entering it with mixed results

Not true either
the lower end IS leaving the labor force (or not joining) even more than than the middle!

Teenagers

20-24

5   indigenous   2015 May 11, 8:20am  

Bob, you are saying that this number is driven by demographics, not the economy?

While the fall has been less dramatic, the pattern is also true for what we have called core private sector services jobs—- distribution and transportation, FIRE (finance, insurance and real estate), information technology, the white collar professions, and business management and support services. At a posting of 38.6 million jobs on Friday, the print had still not reached its December 2007 level.

In fact, while these are the highest paying jobs in the US economy—with annualized pay rates around $50k—- the monthly rate of growth since January 2000 is just 9k jobs.

Likewise, the very highest paying jobs in the US economy—core government employment outside of education and the post office—where average pay rates exceed $60k per year, is also still below is 11.2 million level of December 2007.

To be sure, from a fiscal policy viewpoint, this is more than welcome, and there are millions more of these taxpayer funded jobs—especially the 800,000 in the Pentagon—that could be readily dispensed with. But that makes the “jobs count” game all the more ridiculous.

Taken together, the goods producing sector plus core private business services and government outside of education constitute the “breadwinner economy”. Average pay rates are upwards of $50K annually and in many areas of the country approximate the median household income and provide the basis to support a family. Yet at the Friday count of 68.6 million breadwinner jobs, were still 3.3 million jobs short of the December 2007 peak. In fact, there are 5% few breadwinner jobs today than there were in January 2000.

>http://davidstockmanscontracorner.com/11880/

6   bob2356   2015 May 11, 8:29am  

smaulgld says

bob2356 says

The lower end has always had much lower employment. They aren't leaving the labor force, they are entering it with mixed results

Not true either

the lower end IS leaving the labor force (or not joining) even more than than the middle!

You repeated what I said and called it not true. What exactly would the philosophical difference between not joining and trying to enter with mixed results. How do you know why they are not joining? Is it not trying or staying in school longer or not able to find a job or all of the above?

Can we stay focused? We were discussing the 25-54 group what you called the heart of the matter. I was pointing out the lower part 25-54 group has lower rates so you post 16-20 and 21-24 charts. WTF?

7   bob2356   2015 May 11, 8:42am  

indigenous says

Bob, you are saying that this number is driven by demographics, not the economy?

No, it's not the exclusion principle. I'm saying that boomer demographics is affecting the number no matter what people like smgauld making statements like "Labor Force Participation Rate Isn't Falling Because of Retiring Baby Boomers" say. Look at the swings in the size of the different groups over the last 20 years. There are certainly other factors like the economy is still weak. For christs sakes the drop in the participation rate is only a couple percentage points. It's not the collapse of western civilization.

Virtually nothing is single factorial, a trap you fall into.

8   indigenous   2015 May 11, 9:12am  

bob2356 says

drop in the participation rate is only a couple percentage points.

Fair enough but that is a two way street regarding the statistical cherry picking and BLS numbers. If you go with actual numbers it is more indicative.

9   Mark   2015 May 11, 9:46am  

Cut through it all.
There hasn't been a recovery (except for the very top) despite tons of cheap money created and piles of bad debt taken by the Fed.
The economy is not really growing and most Americans get poorer every year. We continue to create bubbles to give illusion of creating wealth & prosperity.

10   smaulgld   2015 May 11, 10:05am  

bob2356 says

You repeated what I said and called it not true. What exactly would the philosophical difference between not joining and trying to enter with mixed results. How do you know why they are not joining? Is it not trying or staying in school longer or not able to find a job or all of the above?

Younger workers and prime age workers not attached to the labor force in increasing numbers while retirees are increasingly attached to the labor force is a sign of an unhealthy labor force.

11   smaulgld   2015 May 11, 10:07am  

bob2356 says

For christs sakes the drop in the participation rate is only a couple percentage points. It's not the collapse of western civilization.

Who claimed as such? A decline is a decline and runs counter to the b.s. that the labor market is improving. Improving is generally associated with increases not excuses as to why decreases are taking place.

12   smaulgld   2015 May 11, 10:20am  

Call it Crazy says

bob2356 says

For christs sakes the drop in the participation rate is only a couple percentage points.

"just a couple of percentage points"...

What's a couple of percentage points of 70 MILLION people?

Whether younger people at "the lower end has always had much lower employment." as Bob says, it's lower now than during the great recession as are ALL age groups other than those 55+ and 65+s

13   Blurtman   2015 May 11, 11:12am  

Those young fookers will probably live to 100 on average, and so 20-35 is the new 10-25, no worries.

14   smaulgld   2015 May 11, 11:14am  

Blurtman says

Those young fookers will probably live to 100 on average, and so 20-35 is the new 10-25, no worries.

Yep no worries, start work at 65

15   smaulgld   2015 May 11, 11:30am  

Call it Crazy says

The EBRI survey found that roughly six of every 10 Americans have less than $25,000 in total retirement savings.

Another false internet meme is "boomers are selfish" boomers were duped as a generation in that they were told if they paid 8% of their salary in SS taxes they would get a pension for retirement. Now they are told "sorry no money left"
Why is there no money left for social security but always money left for welfare and the military- that money doesnt run out.

16   Blurtman   2015 May 11, 11:59am  

smaulgld says

Now they are told "sorry no money left"

I have never understood that argument, that is, that the SS trust fund money, invested in non-marketable US Treasuries, is gone, but that the money folks invested in marketable US Treasuries is still there. If folks holding US Treasuries only realized that the money were gone, my, my, what would happen to interest rates?

17   indigenous   2015 May 11, 4:59pm  

bob2356 says

America is toast.

What countries are going to be spared?

18   bob2356   2015 May 11, 5:42pm  

indigenous says

bob2356 says

America is toast.

What countries are going to be spared?

Spared from what? America slowly losing its control of the world financial system and having to squarely face it's economic problems?

19   indigenous   2015 May 11, 5:43pm  

bob2356 says

Spared from what?

Economic depression

20   HEY YOU   2015 May 11, 10:58pm  

Cut all taxes & regulations on "Corporations are people" & outsource,so the unemployed overseas can have jobs & the benefits will Trickle Down to Americans as proven by "Voodoo Economics".

21   bob2356   2015 May 11, 11:31pm  

jazz music says

So where would you go, Melbourne, AU? Perth, AU? New Zeland? Costa Rica?

Can you continue to receive social security retired benefits?

Andorra would be my first choice, but they priced me out a few years ago. Used to be able to get in with 50k, now it's 400k. I have NZ and Belize citizenship as well as permanent residency in Australia and France so I have choices without worrying about being involved with medicare or medical insurance. I own in NZ already and will probably end up buying a small house in Languedoc Roussillon which is my favorite area of France. Get 30 minutes inland from the Côte Vermeille/Perpignan area toward Parc naturel régional des Pyrénées or Quillan there is very reasonable real estate. I would have to relearn to speak poor french in the present tense. Ou est the fucking bathroom s'il vous plais. Let it never be said I didn't do my part to advance anglo french relations. I would spend time in both places each year along with some other travelling. Smart play would be spend 182 days in each country and pay taxes to no one but it probably won't work out that way.

There are many other areas that would be interesting to live, but I probably won't. Campione d'Italia or San Marino as tax free residencies in Italy would be cool, but really hard to get into. The gippsland/lakes region (eastern victoria about 5 hours from Melbourne) would be great, I lived there a short while and really liked it. But the cost of real estate in oz is pretty prohibitive even renting in smaller areas. NZ isn't cheap either but it's a lot less than oz Perth is really, really nice, I went to a conference there and I would almost be tempted even with high real estate and no skiing. But it's truly the end of the earth. I've done the end of the earth. Costa Rica is a super fun place, I spent 9 months in the arenal area in 2002 and had a great time. Even learned some essential spanish like beer, bathroom, and used tires. Very cool place that I will spend time at in the future, but a little too much hassle for long term day to day living. Belize and many of the south pacific islands I've visited are in that category as well.

Melbourne? Big cities? Not me these days. I haven't lived in a town with a traffic light since 2006. I'm enjoying living in a small New England town that's 40 miles from the nearest traffic light/strip mall/fast food/wallmart/Mcrestaurant. I don't need or desire those things.

Certainly you can keep your social security, I'm not collecting yet, but I will eventually. Even if you renounce your citizenship you can still collect, they just withhold 30% to make sure you file your taxes to get it back. They will do that with IRA withdrawals also if you renounce. Unless you live in Cuba or North Korea you can get ss check mailed to you. Oddly enough you can get it mailed to Iran. I'm getting heavy pressure from friends in Tehran to go skiing in Iran next winter, that would be interesting. Direct deposit is available in most countries. Or SS can put it directly into Debit Express debit card. Not sure that's a great idea.

22   Strategist   2015 May 12, 7:44am  

bob2356 says

Melbourne? Big cities? Not me these days. I haven't lived in a town with a traffic light since 2006. I'm enjoying living in a small New England town that's 40 miles from the nearest traffic light/strip mall/fast food/wallmart/Mcrestaurant. I don't need or desire those things.

Certainly you can keep your social security, I'm not collecting yet, but I will eventually. Even if you renounce your citizenship you can still collect, they just withhold 30% to make sure you file your taxes to get it back. They will do that with IRA withdrawals also if you renounce. Unless you live in Cuba or North Korea you can get ss check mailed to you. Oddly enough you can get it mailed to Iran. I'm getting heavy pressure from friends in Tehran to go skiing in Iran next winter, that would be interesting. Direct deposit is available in most countries. Or SS can put it directly into Debit Express debit card. Not sure that's a great idea.

Interesting. If you want your dollar to go further, won't Mexico or an Asian country like Thailand be a good choice? You don't need to renounce your American citizenship, you can just live in those countries.

23   indigenous   2015 May 12, 7:51am  

Social Security may not be worth bothering with.

24   bob2356   2015 May 12, 11:12am  

Strategist says

Interesting. If you want your dollar to go further, won't Mexico or an Asian country like Thailand be a good choice? You don't need to renounce your American citizenship, you can just live in those countries.

My dollar would go much, much further if I renounced. I would only be subject to income tax where I was resident, if anywhere. I would not have to pay taxes on my entire global income to the US on top of that, only the portion earned in the US.

But it's not all about making my dollar to go further. I want to live someplace I like. America of 2015 really isn't that place any more. Yes you can live very cheaply in Mexico,Thailand, Belize, Costa Rica, etc.. But there is a hell of a lot of difference in culture and lifestyle between the being an hour to Barcelona or Montpellier or Wellington and half a days drive on really good roads (or high speed train) to Paris or Rome or Auckland than being in some expat compound (actually I always live local) in third world places many hours drive over bumpy roads to get to third world cities. As much as I like Costa Rica for example it's a really crappy 4-5 hour 120 mile (yes that's right you average 25 miles an hour on the pan american highway) drive from Lake Arenal to San Jose, then you are in San Jose, big f'ing deal. There's not a lot there.

Also my criteria is reasonable access to skiing and the beach. That leaves out a LOT of places. Thirdly I would have to buy health insurance and pay for health care if I live somewhere I don't have citizenship or residency at least until establishing permanent residency.

indigenous says

Social Security may not be worth bothering with.

Good thing I'm not considering it a big part of my budget in the future.

25   dublin hillz   2015 May 12, 11:22am  

Geezers fighting to death to see who will get most part time hours at Kohl's will be a much more entertaining pay per view event than an overhyped boxing match.

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