{"id":414,"date":"2013-04-21T17:19:25","date_gmt":"2013-04-21T21:19:25","guid":{"rendered":"http:\/\/www.dougsbriefcase.com\/blog\/?p=414"},"modified":"2013-04-21T17:19:25","modified_gmt":"2013-04-21T21:19:25","slug":"americas-shrinking-workforce","status":"publish","type":"post","link":"https:\/\/www.dougsbriefcase.com\/blog\/americas-shrinking-workforce\/","title":{"rendered":"America\u2019s Shrinking Workforce"},"content":{"rendered":"

\"Unemployment<\/a>Amer\u00adi\u00adca had a bad week. We once again were remind\u00aded that ter\u00adror\u00adism rep\u00adre\u00adsents a con\u00adtin\u00adu\u00ading threat, that indi\u00advid\u00adu\u00adals poi\u00adsoned by hate\u00adful ide\u00adol\u00ado\u00adgy can inflict great harm. We were also remind\u00aded that we are capa\u00adble of respond\u00ading to these bru\u00adtal acts, as Pres\u00adi\u00addent Oba\u00adma<\/a> said, \u201cSelf\u00adless\u00adly. Com\u00adpas\u00adsion\u00adate\u00adly. And unafraid.\u201d<\/p>\n

Ter\u00adror\u00adism presents a chal\u00adlenge to which we\u2019ve yet to for\u00admu\u00adlate a durable response. We remain vul\u00adner\u00ada\u00adble, despite the government\u2019s con\u00adtin\u00adued efforts to keep us safe.<\/p>\n

There is anoth\u00ader prob\u00adlem, less hor\u00adrif\u00adic in its imme\u00addi\u00adate effects but no less intractable, that also is get\u00adting the bet\u00adter of us: the prob\u00adlem of job\u00adless\u00adness. What\u2019s hap\u00adpened over the past sev\u00ader\u00adal years is per\u00adplex\u00ading. It\u2019s true that the unem\u00adploy\u00adment rate \u2013 the per\u00adcent\u00adage of work\u00ading-aged peo\u00adple who are seek\u00ading work, but can\u2019t find it \u2013 has edged down ever so slow\u00adly, from 10 per\u00adcent in Octo\u00adber 2009 to 7.6 per\u00adcent <\/a>last month. That rate is still too high; we\u2019ve not seen unem\u00adploy\u00adment stay above 7 per\u00adcent for so long since the Great Depres\u00adsion. But it is at least mov\u00ading in the right direction.<\/p>\n

What\u2019s trou\u00adbling is that the num\u00adber of peo\u00adple who have giv\u00aden up on find\u00ading a job has increased at an alarm\u00ading rate over the past few years. The result is that the work\u00adforce par\u00adtic\u00adi\u00adpa\u00adtion rate \u2013 the per\u00adcent\u00adage of work\u00ading-aged peo\u00adple who have a job or are look\u00ading for one \u2013 is at a 30-year low. This chart<\/a>,<\/span> from the Fed\u00ader\u00adal Reserve Bank of St. Louis, using data from the Bureau of Labor Sta\u00adtis\u00adtics (BLS<\/span>), illus\u00adtrates the trend:<\/p>\n

\"FRED<\/a><\/p>\n

The chart shows that the per\u00adcent\u00adage of peo\u00adple in the work\u00adforce climbed steadi\u00adly for near\u00adly four decades, from the mid-1960s through the turn of the cen\u00adtu\u00adry, exceed\u00ading 67 per\u00adcent for the first time in 1997. From that point on, it plateaued, before drop\u00adping to 66 per\u00adcent in Feb\u00adru\u00adary 2004. It hov\u00adered around that lev\u00adel until Octo\u00adber 2008, when it began drop\u00adping pre\u00adcip\u00adi\u00adtous\u00adly. As of last month, it stood at 63.3 per\u00adcent, its low\u00adest since May 1979, accord\u00ading to the BLS<\/span>.<\/a><\/p>\n

Econ\u00ado\u00admists have groped for expla\u00adna\u00adtions. The most obvi\u00adous would be that the baby boom pop\u00adu\u00adla\u00adtion is mov\u00ading into its retire\u00adment years and leav\u00ading the work\u00adforce. If that were the case, we would expect that the par\u00adtic\u00adi\u00adpa\u00adtion rate of peo\u00adple over 54 would be plum\u00admet\u00ading. It is not.<\/p>\n

 \"FRED<\/a><\/p>\n

In fact, the tra\u00adjec\u00adto\u00adry of this curve<\/a> is almost the exact oppo\u00adsite of what we saw in the chart of over\u00adall work\u00adforce par\u00adtic\u00adi\u00adpa\u00adtion rates. The per\u00adcent\u00adage of peo\u00adple over 55 in the work\u00adforce is the high\u00adest it\u2019s been since the ear\u00adly 1960s. It began its rise from under 30 per\u00adcent to over 40 per\u00adcent dur\u00ading the ear\u00adly 1990s and is high\u00ader today than it was before the Great Reces\u00adsion. The per\u00adcent\u00adage of old\u00ader work\u00aders par\u00adtic\u00adi\u00adpat\u00ading in the job mar\u00adket actu\u00adal\u00adly has grown since 2007, the oppo\u00adsite of what\u2019s hap\u00adpened with the over\u00adall rate.<\/p>\n

So if old\u00ader work\u00aders are more like\u00adly to have jobs or active\u00adly seek them, per\u00adhaps the decline in work\u00adforce par\u00adtic\u00adi\u00adpa\u00adtion is attrib\u00adut\u00adable to few\u00ader younger work\u00aders. As with old\u00ader work\u00aders, there is a good deal of anec\u00addo\u00adtal evi\u00addence about young peo\u00adple delay\u00ading their entry into the labor force. Per\u00adhaps that is what has caused the steep down\u00adturn since 2007.<\/p>\n

 \"FRED<\/a><\/p>\n

The work\u00adforce par\u00adtic\u00adi\u00adpa\u00adtion rate among 20\u201324 year-olds<\/a> peaked in the mid-1980s at near\u00adly 80 per\u00adcent. Last month, it reached a 40-year low of 70.1 per\u00adcent. So it prob\u00ada\u00adbly is the case that younger peo\u00adple are help\u00ading to depress work\u00adforce par\u00adtic\u00adi\u00adpa\u00adtion rates by delay\u00ading their entry into the job mar\u00adket. That said, this is a rel\u00ada\u00adtive\u00adly small group of peo\u00adple, rep\u00adre\u00adsent\u00ading only 5 age cohorts. While their low\u00ader par\u00adtic\u00adi\u00adpa\u00adtion cer\u00adtain\u00adly affects over\u00adall rates, they can\u2019t alone account for the decline we saw in the first chart.<\/p>\n

And that brings us to the core of the labor force, peo\u00adple aged 25\u201354. This is by far the largest group we\u2019ve looked at. It\u2019s also the most steady. Young peo\u00adple might delay get\u00adting a job by stay\u00ading in school or liv\u00ading with their par\u00adents. Old\u00ader work\u00aders who despair of find\u00ading work may retire, per\u00adhaps qual\u00adi\u00adfy\u00ading for dis\u00adabil\u00adi\u00adty ben\u00ade\u00adfits <\/a>under Social Secu\u00adri\u00adty. But peo\u00adple aged 25\u201354 are at the prime of their work\u00ading years. If the par\u00adtic\u00adi\u00adpa\u00adtion rate in this cohort is falling, that is much hard\u00ader to explain or dis\u00admiss. Unfor\u00adtu\u00adnate\u00adly, it is declin\u00ading<\/a>.<\/p>\n

 \"FRED<\/a><\/p>\n

Grant\u00aded, that decline is not as dra\u00admat\u00adic as the one we saw in the first chart, but it is sig\u00adnif\u00adi\u00adcant and mim\u00adics the trend in the over\u00adall par\u00adtic\u00adi\u00adpa\u00adtion rate that began around the turn of the cen\u00adtu\u00adry. The 81.1 per\u00adcent rate is the low\u00adest since Decem\u00adber 1984 and sub\u00adstan\u00adtial\u00adly below its April 2000 peak of 84.4 per\u00adcent. Because this group is so large, even declines of a few per\u00adcent\u00adage points strong\u00adly affect the over\u00adall numbers.<\/p>\n

We\u2019ve reached a point where near\u00adly one in five peo\u00adple in their prime work\u00ading years nei\u00adther has a job nor is both\u00ader\u00ading to seek one. It\u2019s one thing for a young per\u00adson to put off a job search or for an old\u00ader one to give up on find\u00ading work. It\u2019s quite anoth\u00ader for peo\u00adple in their prime earn\u00ading years to drop out of the labor force. That the par\u00adtic\u00adi\u00adpa\u00adtion rate con\u00adtin\u00adues to sink four years after the Great Reces\u00adsion end\u00aded sug\u00adgests that the jobs prob\u00adlem isn\u2019t entire\u00adly cycli\u00adcal. The plunge in work\u00adforce par\u00adtic\u00adi\u00adpa\u00adtion has per\u00adsist\u00aded despite a tepid recov\u00adery and a boom\u00ading stock market.<\/p>\n

That plunge is also respon\u00adsi\u00adble for the mild\u00adly bet\u00adter news on the unem\u00adploy\u00adment rate that I men\u00adtioned ear\u00adli\u00ader, since peo\u00adple who aren\u2019t look\u00ading for work don\u2019t fig\u00adure in its com\u00adpu\u00adta\u00adtion. In cal\u00adcu\u00adlat\u00ading the unem\u00adploy\u00adment rate, the BLS<\/span> divides the num\u00adber of unem\u00adployed job seek\u00aders by the total num\u00adber of work\u00aders and those look\u00ading for work. Peo\u00adple who have dropped out of the labor force and are no longer hunt\u00ading for a job are exclud\u00aded from the cal\u00adcu\u00adla\u00adtion. It is as if they don\u2019t exist.<\/p>\n

If our work\u00adforce par\u00adtic\u00adi\u00adpa\u00adtion rate were at its Novem\u00adber 2007 lev\u00adel of 66.1 per\u00adcent, there would be near\u00adly 7 mil\u00adlion more peo\u00adple count\u00aded as unem\u00adployed. That would raise the March 2013 unem\u00adploy\u00adment rate from its report\u00aded lev\u00adel of 7.6 per\u00adcent to 11.5 per\u00adcent, by my cal\u00adcu\u00adla\u00adtion, using BLS<\/span> data.<\/p>\n

Let me stip\u00adu\u00adlate that I blame this nei\u00adther on Pres\u00adi\u00addent Oba\u00adma nor on Pres\u00adi\u00addent Bush. The prob\u00adlem we face seems to me to be much larg\u00ader than any one per\u00adson, or any two peo\u00adple, could cre\u00adate. I also reject the notion that the gov\u00adern\u00adment has been indif\u00adfer\u00adent to this prob\u00adlem. Pres\u00adi\u00addent Oba\u00adma has run up mas\u00adsive deficits in part on the the\u00ado\u00adry that increased gov\u00adern\u00adment spend\u00ading, financed by debt rather than tax\u00ades, would stim\u00adu\u00adlate eco\u00adnom\u00adic growth and job cre\u00adation. Over this same peri\u00adod of time, the Fed\u00ader\u00adal Reserve has embarked on an unprece\u00addent\u00aded series of actions, pump\u00ading tril\u00adlions of dol\u00adlars into pri\u00advate banks. The the\u00ado\u00adry is that the banks would, in turn, extend cheap cred\u00adit to busi\u00adness\u00ades and fam\u00adi\u00adlies, prompt\u00ading indi\u00advid\u00adu\u00adals to spend more mon\u00adey and busi\u00adness\u00ades to hire more workers.<\/p>\n

The issue isn\u2019t lack of effort; it\u2019s lack of suc\u00adcess or even of an expla\u00adna\u00adtion for why noth\u00ading seems to have worked to this point.<\/p>\n

We were remind\u00aded again last week that we are not safe from ter\u00adror\u00adism.  That reminder came in the form of sud\u00adden explo\u00adsions, plumes of smoke, the faces of vic\u00adtims and their griev\u00ading fam\u00adi\u00adlies, of man\u00adhunts, shootouts and acts of hero\u00adism and courage.<\/p>\n

Reminders of our shrink\u00ading work\u00adforce are more pro\u00adsa\u00adic \u2014 num\u00adbers drawn from sur\u00adveys, tab\u00adu\u00adlat\u00aded and ana\u00adlyzed by gov\u00adern\u00adment econ\u00ado\u00admists.  The images are far less stark but their impli\u00adca\u00adtions are no less portentous.<\/p>\n","protected":false},"excerpt":{"rendered":"

Amer\u00adi\u00adca had a bad week. We were remind\u00aded that ter\u00adror\u00adism is a con\u00adtin\u00adu\u00ading threat. There is anoth\u00ader prob\u00adlem, less hor\u00adrif\u00adic but no less intractable: job\u00adless\u00adness. Con\u00adtin\u00adue read\u00ading \u2192<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":415,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","wp_typography_post_enhancements_disabled":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"nfd_image_url":"","nfd_onboarding_generated":"","footnotes":"","jetpack_publicize_message":"Our incredible shrinking workforce #unemployment #economy http:\/\/wp.me\/p3bgDT-6G","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[18,102],"tags":[114,113,90,84,112,115,110,34,1187,111],"class_list":["post-414","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-unemployment","tag-bls","tag-bureau-of-labor-statistics","tag-disability","tag-federal-reserve","tag-federal-reserve-bank-of-st-louis","tag-great-recession","tag-jobless-rate","tag-social-security","tag-unemployment","tag-workforce-participation-rate"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t