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It's pretty much common sense that people at the end of their careers make more than people just starting out their careers. It shouldn't take a genius to understand that.
Ken
I half agree. Starting out: wages are usually low; but, for many reasons, many peoples' wages go up then drop for the same kinds of work like IT, skilled blue collar trades and so on.
It's pretty much common sense that people at the end of their careers make more than people just starting out their careers. It shouldn't take a genius to understand that.
Ken
People just starting out in their careers don't fill the jobs of those leaving an organization at the end of their careers.
As seen in above chart, in 2004, the Bureau of Labor Statistics itself was forecasting an increase in the overall participation rate – and we must assume that America’s demographic profile was known to the labor market experts in 2004 – only to slowly at first, then very fast, revise it ever lower… and still it was unable to catch up to the unfolding downward reality.
Yet, some continue to reference the participation rate and demographics in the same sentence.
I've been saying for a while that demographic changes in the U.S. - specifically the aging of the enormous Babyboomer generation is responsible for the majority of the decline in the Labor Force Participation Rate. As it turns out the aging of the Babyboomers may also be responsible for the apparent very slow rise in the increase of average wages. This is because those folks retiring from the workforce are generally at their peak earnings of their entire working lives. Meanwhile the folks entering the workforce are starting at the bottom - with much lower wages - and even those folks who end up stepping into the jobs directly left by the retiring boomers are not yet making the peak wages the retiring Babyboomers were making (they will EVENTUALLY - but not when they first step into the job).
"...Concern over the growth rate of wages may be misplaced, and retiring baby boomers are to blame, Ed Keon, portfolio manager at Prudential's QMA, told CNBC on Monday.
Keon's research indicates annualized wage increases of 3 percent to 4 percent—much higher than government data. "I think even below the surface that the rate of growth of wages might be even higher than the official numbers suggest. There's a bit of a headwind from baby boomers retiring and being replaced by less expensive workers."
"There's about 250,000 boomers retiring and claiming Social Security every month. And there's about net 500,000 people replacing them," he said in a "Squawk Box" interview. The assumption is boomers are making more than the younger workers replacing them...."
I agree that the retirees wages being much higher than newbies wages
as a supervisor I would not be hiring a no experience new guy at the same rate a retiring mechanic making 30-40/hr... starting wage might be 15/hr
also the supply/demand plays in there too, as your post shows 250k boomers , with 500k replacing them monthly....which is why the LFPR should be increasing, not shrinking
Exactly. Nor, any reason to faux-blame a do nothing Republican Congress for lack of job growth. Fake 'problems', 'sins' blamed on conservatives by progressives. Lies, subterfuge, misrepresentation; the only way to support the progressive agenda. Throw in subpar public education to assure an ignorant populace buys in. To assure the populace is not educated for today's market. Well, there you go.
Quote:
Originally Posted by whogo
Good, now we know there is no reason to raise the minimum wage or tax the rich.
Good, now we know there is no reason to raise the minimum wage or tax the rich.
Quote:
Originally Posted by earthlyfather
Exactly. Nor, any reason to faux-blame a do nothing Republican Congress for lack of job growth. Fake 'problems', 'sins' blamed on conservatives by progressives. Lies, subterfuge, misrepresentation; the only way to support the progressive agenda. Throw in subpar public education to assure an ignorant populace buys in. To assure the populace is not educated for today's market. Well, there you go.
Right-wingers: Because someone has to throw rose petals at the feet of the obscenely rich.
As seen in above chart, in 2004, the Bureau of Labor Statistics itself was forecasting an increase in the overall participation rate – and we must assume that America’s demographic profile was known to the labor market experts in 2004 – only to slowly at first, then very fast, revise it ever lower… and still it was unable to catch up to the unfolding downward reality.
Yet, some continue to reference the participation rate and demographics in the same sentence.
Look at your OWN chart. WHEN did those projections start to go down? The projections from 2000 and 2002 had the projections going up, but by 2006 those projections were ALREADY pointing down. There hasn't been an UPWARD projection since 2002. Now it IS true that the LFPR dropped faster than expected - and that WAS a result of the Great Recession - something that was not forecast back in 2006 - but what else would one really expect? Recessions ALWAYS lower the LFPR. The point is, Demographics were ALREADY showing that the LFPR would start to fall back in studies done in 2006 - and the collapse of the LFPR began back around 2002/2004. Much of that had to do with the aging demographics.
Now, let's address one of the studies referenced by the Zerohedge graph. Here is the link to Toosi's own study - one of the ones Zerohedge references:
This study was released in 2005 - and it specifically shows in table 1 that there was projected to be almost zero growth in the younger labor force - and that the older labor force would grow much more rapidly. This was specifically a function of the huge size of the babyboomer generation.
Now look at table 2. Toosi himself projects that the participation rate would BARELY GROW from 2000 to 2010 and after that, it would SHRINK - starting with the years between 2010 and 2015, but especially between 2015 and 2030. This was a DIRECT RESULT of changing age demographics. Now, the Great Recession - which was NOT projected at the time - caused that mass exit from the workforce to happen more severely a bit earlier than it would have earlier, but it didn't change the fact that even Tooni saw it coming due to the demographic changes about to unfold.
Tooni clearly shows that the biggest upward change in the participation rate occurred between 1970 and 1990 - when the babyboomers were in their peak years in the labor force, while the biggest downward change in the participation rate were projected to occur between 2015 and 2030, when those same babyboomers would aging their way out of the workforce. That demographic change is a large part of what's been going on with the LFPR. It's something that Toomi predicted back in 2005.
From the Toomi study itself:
"...Major factors affecting labor force change
Population: birth patterns. A number of distinct birth patterns
evolved in the population of the United States in the last
century that led to similar labor force patterns as the various
cohorts reached 16 years of age and joined the workforce.
These demographic patterns can be traced chronologically
as follows:
• Birth dearth: the decline in the number of births between
the late 1920s and early 1930s.
• Baby boom: the significant increase in the number of
births between 1946 and 1964, with the peak birth year
being 1957.
• Baby bust: a decrease in the number of births occurring
between the end of the baby boom and the late 1970s.
• Baby-boom echo or baby boomlet: a growth in the number
of children born to the baby-boom generation during
the 1980s and early 1990s...."
Demographics has a HUGE impact on the LFPR - among a whole bunch of other things it impacts - even the article Zerohedge references says that.
Ken, did the BLS not know the demographics of the country in 2006 or 2004? Did you not read my previous post?
How about an example?
The baby boomer generation is known for it’s size. But, recent generations are even larger.
Let’s take the example of those who turned 65 in 2014, born in 1949 and those who turned 22 in 2014, born in 1992. I chose age 22 to account for college even though some of them entered the work force earlier, if they could find a job.
There were 3.56 million people born in the US in 1949. 85% or 3.026 million are alive.
There were 4.08 million people born in 1992. Probably at least 4 million still alive.
Let’s assume that all of the people who turn 65 next year retire.
That is still a net gain of about a million potential workers.
As we all know, well maybe not all, all of those people do not stop working unless they cannot find a job.
Last edited by texan2yankee; 02-11-2015 at 07:16 AM..
I agree that the retirees wages being much higher than newbies wages
as a supervisor I would not be hiring a no experience new guy at the same rate a retiring mechanic making 30-40/hr... starting wage might be 15/hr
also the supply/demand plays in there too, as your post shows 250k boomers , with 500k replacing them monthly....which is why the LFPR should be increasing, not shrinking
1) Those 250,000 retiring boomers going on SS are not the only older people who leave the labor force. The LFPR begins dropping after age 45 - indicating that many older folks "retire" even BEFORE they reach SS age. Genearlly this is one-half of an older couple. Such folks "retire" early for a number of reasons - declining health, taking care of grandkids so the parents can work (daycare is EXPENSIVE), etc, etc, etc. The "250,000" number quoted is ONLY those waiting until they reach SS-benefit age to retire, but by the time folks reach age 62 their LFPR has ALREADY DROPPED from a peak of over 82% at age 35-45 down to under 64% - meaning that OVER 20% of the workforce has ALREADY RETIRED BEFORE they can claim SS.
2) There are well over 300,000+ babies born in the U.S. every month. Those 300,000 or so mothers - if they were in the labor force to begin with - are not in the labor force when they give birth. Some of them will no doubt re-enter the workforce, but not all.
Play the animation and watch the babyboomer bulge move into their retirement years - there's a WHOLE LOT OF US.
Ken
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