labor force participation at 34 year low-thanks Obama! (deaths, 2013, rates)
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Umm, as part of the under employed...I definitely want to work. That isn't the problem.
The problem is the amount of workers entering the work force is far more than those exiting it. No one is retiring...and even if they are, they're supplementing that retirement with other jobs....
I remember working a part time job a year or so back where the average amount of hours everyone got was 10 a week. Yet, people showed up for those 10 hours because they wanted/needed to be there. The culture is such that people know they need to work, but getting in somewhere isn't easy.
People have retired and left the labor force for thousands of years...
Retirement as a real concept has only really existed since 1889 when Germany instituted social security for the elderly. Lack of pensions, social welfare, and low life expectancy meant some sort of way to make ends meet before then.
I am pretty sure that 1889 to 2013 is not thousands of years. You seem to be off by quite a number of years.
The drop in the labor force is being driven by more than demographic shifts. There are deeper problems at work in the economy. It's more than just a structural skills mismatch, though.
A record number of Americans have claimed federal disability payments. It's not necessarily because of fraud - a study found that fraudulence isn't particularly correlated with the business cycle - but that a struggling economy causes some people who might be otherwise employable to file for disability. There are two troubling aspects here: the federal disability program is expensive, and once a worker goes on disability, they're unlikely to re-enter the workforce.
There are long-term factors at play here - some of them structural - that mean we are a very long way away from full employment.
"Media commentary suggests that the decline in the labor force participation rate (the number of people in the labor force as a percent of the civilian population, aged 16 and older) is due to potential workers abandoning the search for employment because they assume, in this tough economy, there is no job out there for them. However, the facts simply do not support this claim, at least over the past two and a half years. reducing labor force participation has been the explosive growth in those claiming social security disability benefits. However, this can still only account for a small part of the decline. In fact, the evidence suggests that by far the biggest reason for the decline in participation rates has been the aging of the population, as more workers enter age groups which are typically more associated with retirement than work.
While this might seem like a subject of only academic interest, it is actually very important for investors. If low participation rates are being driven mainly by demographics rather than economics, then faster economic growth will not boost them. If this is the case, then the unemployment rate could well fall faster than the Federal Reserve assumes, triggering an earlier-than-expected increase in short-term interest rates. In addition, a continued fall in labor force participation could limit growth in both the economy and earnings going forward. In short, a continuation of low labor force growth could be a headwind for both the bond market and the stock market in the years ahead."
Retirement as a real concept has only really existed since 1889 when Germany instituted social security for the elderly. Lack of pensions, social welfare, and low life expectancy meant some sort of way to make ends meet before then.
I am pretty sure that 1889 to 2013 is not thousands of years. You seem to be off by quite a number of years.
I'm pretty sure people retired well before the existance of Social Security.
"Media commentary suggests that the decline in the labor force participation rate (the number of people in the labor force as a percent of the civilian population, aged 16 and older) is due to potential workers abandoning the search for employment because they assume, in this tough economy, there is no job out there for them. However, the facts simply do not support this claim, at least over the past two and a half years. reducing labor force participation has been the explosive growth in those claiming social security disability benefits. However, this can still only account for a small part of the decline. In fact, the evidence suggests that by far the biggest reason for the decline in participation rates has been the aging of the population, as more workers enter age groups which are typically more associated with retirement than work.
While this might seem like a subject of only academic interest, it is actually very important for investors. If low participation rates are being driven mainly by demographics rather than economics, then faster economic growth will not boost them. If this is the case, then the unemployment rate could well fall faster than the Federal Reserve assumes, triggering an earlier-than-expected increase in short-term interest rates. In addition, a continued fall in labor force participation could limit growth in both the economy and earnings going forward. In short, a continuation of low labor force growth could be a headwind for both the bond market and the stock market in the years ahead."
Let me just clear that up here for everyone so that there's no confusion...
Civilian labor force: All persons in the civilian noninstitutional population classified as either employed or unemployed.
"Media commentary suggests that the decline in the labor force participation rate (the number of people in the labor force as a percent of the civilian population, aged 16 and older) is due to potential workers abandoning the search for employment because they assume, in this tough economy, there is no job out there for them. However, the facts simply do not support this claim, at least over the past two and a half years. reducing labor force participation has been the explosive growth in those claiming social security disability benefits. However, this can still only account for a small part of the decline. In fact, the evidence suggests that by far the biggest reason for the decline in participation rates has been the aging of the population, as more workers enter age groups which are typically more associated with retirement than work.
While this might seem like a subject of only academic interest, it is actually very important for investors. If low participation rates are being driven mainly by demographics rather than economics, then faster economic growth will not boost them. If this is the case, then the unemployment rate could well fall faster than the Federal Reserve assumes, triggering an earlier-than-expected increase in short-term interest rates. In addition, a continued fall in labor force participation could limit growth in both the economy and earnings going forward. In short, a continuation of low labor force growth could be a headwind for both the bond market and the stock market in the years ahead."
That's bunk. People in elderly care centers or retirement facilities are not counted in the stats and therefore cannot possibly account for "the biggest reason for this decline" as you suggest.
Now that that's clear we can move forward without trying to claim people retired are somehow still employed or unemployed.
The labor force participation rate is calculated by dividing the labor force by the total population. Do you have some reason to dispute JPM's findings? It was posted in the other thread that the BLS was predicting a lower LFP rate since at least 2006.
The labor force participation rate is calculated by dividing the labor force by the total population. Do you have some reason to dispute JPM's findings? It was posted in the other thread that the BLS was predicting a lower LFP rate since at least 2006.
% of civilian non-institutional population 16+ either working or looking for a job
From your link...
Exactly what I posted directly from the BLS website.
That's bunk. People in elderly care centers or retirement facilities are not counted in the stats and therefore cannot possibly account for "the biggest reason for this decline" as you suggest.
Not me, JPMorgan conducted the analysis.
Here is the BLS stating the same thing. The participation rate peaked in the 90's.
The aging of the baby-boom generation and its movement from
the prime-age to the older labor force will decrease the overall
labor force participation rate.
The age composition of the population and labor force is changing due to the increasing
share of older age groups. The older age groups have significantly lower participation rates
than the prime age groups, those between the ages of 25 and 54, which have
strong attachments to the labor market. Once the baby boomers exit the last years of the prime age group
and enter the 55-and-older age group, with participation rates roughly half that of the prime age group,
the overall labor force participation rate will decline significantly.
The lower participation rate of the 55-and-older age group, coupled with the larger share of the older population in
the future, is projected to decrease the overall participation rate.
Last edited by lycos679; 09-01-2013 at 07:06 PM..
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