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The argument that retiring baby boomers are the reason for the decline in labor force participation is debunked fairly easily. The BLS and St Louis Fed actually track the numbers.
The age groups of 55+ and 65+ are actually going back to work. Their labor force participation is INCREASING.
Meanwhile, 20-55 year olds are declining. Don't tell me that all the 20-somethings and 30-somethings are retiring.
The argument that retiring baby boomers are the reason for the decline in labor force participation is debunked fairly easily. The BLS and St Louis Fed actually track the numbers.
The age groups of 55+ and 65+ are actually going back to work. Their labor force participation is INCREASING.
Meanwhile, 20-55 year olds are declining. Don't tell me that all the 20-somethings and 30-somethings are retiring.
I am happy only when U6 unemployment goes down. No other economic indicator matters. And U6 has been stagnant for nine months.
U6 was 10.3% a year ago. It's 9.7% now. The lowest it got in the bubble before the Great Recession was 8.1%. It was higher than it is now in 2003/2004. I don't get the whole "the sky is falling" thing.
U6 was 10.3% a year ago. It's 9.7% now. The lowest it got in the bubble before the Great Recession was 8.1%. It was higher than it is now in 2003/2004. I don't get the whole "the sky is falling" thing.
The problem is that more than 20 states still have U6 above 10%. This is very obvious in places like Florida where employees can still be ultra picky with candidates.
And 8% is way, way better than the nearly 10% that we have today. There is also the issue that U6 is 100% higher than U3, when traditionally the U6 rate was only about 80% higher.
The argument that retiring baby boomers are the reason for the decline in labor force participation is debunked fairly easily. The BLS and St Louis Fed actually track the numbers.
The age groups of 55+ and 65+ are actually going back to work. Their labor force participation is INCREASING.
Meanwhile, 20-55 year olds are declining. Don't tell me that all the 20-somethings and 30-somethings are retiring.
It's only 2 percentage points. When the labor force participation rate drops from 65 percent to 24 percent instead of 22 percent, it hardly makes a dent in the wave of people leaving the labor market.
Notice you intentionally use vastly different time scales also. The time scale for the 20-24 year old graph is much longer and include the baby boomers cohort when the rate was at its peak. There's almost no change in the recent labor force participation for the 20-24 age group.
The important thing in considering the age group is the change in the participation rate as population transitions from age group to the next. The large changes occur from ages 16-24 to 25-34, 45-54 to 55-64, and 55-64 to 65-74.
I realize that rates of change matter, but with about 100 million more people in America today compared to the 80s, you don't think 200k jobs gained today has a different meaning than 200k new jobs gained in the 80s?
If we where able to gain more jobs every month, I think some of the 12 million people who are either detached, quit but want to work or PT who want FT would be in a much better position.
Put all those people back to work, and even though the unemployment rate would remain exactly the same as it is today, our economy would be much better off.
The size of our overall population doesn't mean anything. The population growth we have experienced since the 1980s was mostly concentrated in older age brackets that don't work anyway.
Put it in number terms. In the 80s we had 250k aging into the labor force each month, and 100k retiring. Also add in about 50k immigrants each month and you reach that 200k jobs needed to be added each month at minimum to prevent unemployment.
Today, we still have only about 275k aging into the workforce, and 50k immigrants each month, but we have 250k people retiring each month.
Obviously, these numbers aren't exact, but you get the picture.
If our economy keeps adding 200k jobs each month it will eat through the labor market slack. No doubt about it. We could eat through the labor market slack with even 125k jobs per month.
Fed Funds rate was at 4 percent now in 2006. They would've started raising two-plus years ago in a comparable situation. The only thing different was the compression of the interest rate curve vs. 2004-2006. They had 300 basis points to raise from the Fed Funds rate at 1 percent. They've done too much QE and distorted the interest rate curve.
"All economic news has a good news/bad news quality, and the fall in labor market slack is no exception. The good news is obvious: unemployment rates are down and wages are showing at lesat some early signs of rising. It wasn't obvious, back during the worst of the Great Recession in 2008-2009, how quickly or how much the unemployment rate would decline. As one example of the uncertainty, the Federal Reserve announced in December 2012, that “this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6½ percent," along with some other conditions, to reassure markets that its policy interest rate would remain low.But then the unemployment rate fell beneath 6.5% in April 2014, and the Fed decided it wasn't yet ready to start raising interest rates, so it retracted its policy from less than 18 months earlier.
The corresponding bad news is that whatever you dislike about the labor market can't really be blamed on the Great Recession any more. So if you're worried about issues like a lack of jobs for low-wage labor, too many jobs paying at or near the minimum wage, not enough on-the-job training, not enough opportunities for longer-term careers, loss of jobs in sectors like manufacturing and construction, too much part-time work, inequality of the wage distribution, one can no longer argue that the issues will be addressed naturally as the economy recovers. After all, labor market slack has now already declined to very low levels."
The corresponding bad news is that whatever you dislike about the labor market can't really be blamed on the Great Recession any more.
I wasn't aware that anyone was blaming the GR for that. At rate the things you mentioned are the result of 40 years of policy. I'm not aware of any changes being made to address them before or since the GR.
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How Much Slack is Left in US Labor Markets?
