Labor Force Participation Rate

[edthecynic]

I will boil the facts down to some easy to comprehend statements. All of these are supported by evidence in the OP. Links a-plenty.

1. The participation rate for people over 55 has been going UP, not down. That includes the over-65 age group. UP, not down.

2. The participation rate for educated people is HIGHER than for less educated people.

3. The participation rate for people under 55 has been doing DOWN.

4. The participation rate for 16-24 age group has experienced a particularly LARGE DROP.

5. This has been occuring since before anyone even heard of Barack Obama.

1. That is because the total population of people over 55 has been going up!

3. That is because the total population of people under 55 has been going down!

4. That is because the birth rate has declined after the Boom years.

Which means the retiring Boomers is the single most factor for the decline in LPR since 2008.

Again, you do not understand what the word "rate" means.

If there were 300 sixteen year olds one year, and only 100 sixteen year olds a few years later, that does not tell you if the labor participation rate has gone up or down.

What matters is the percentage of sixteen year olds who are working during each period.

If 200 out of 300 sixteen year olds were working and then only 20 out of 100 sixteen year olds were working, that drop in the participation rate has nothing to do with the fact there are less sixteen year olds.

What the above facts are telling you is that a smaller percentage of people are retiring at 65, and a smaller percentage of young people are going to work. Get it now?

Just because there are MORE people retiring than before does not mean a GREATER PERCENTAGE of older people are retiring. You need to understand the difference. The percentage is what affects the labor force participation rate.

By the same token the fact that more total people are retiring DOES effect the LPR no matter what the rate is, because you have MORE Boomers leaving the workforce than young people entering. The LPR is ALL workers of ALL ages, separating them into groups of unequal size makes comparing percentages meaningless. The only way you can say that % of one group offsets the % of another group is if the size of the 2 groups is the same.

The LPR is dropping because there are 3 million Boomers retiring from the workforce each year and that large number is not being offset by the total of young people and immigrants entering the workforce, no matter what the %.

 

[Darp]

[/QUOTE]
The numbers clearly show the drop in labor force participation rate is the result of a smaller percentage of younger people getting work. If you don't understand the nature of the problem, you can't find the cause. If all you care about is a carefully framed short duration snapshot that only cares about blaming the current occupant of the White House, then you are a part of the problem. You are being a willfully ignorant rube.[/QUOTE]


Ed, I am not quire sure where you are coming from. Are you saying that the bad economy is eliminating jobs for young people? If so agree, the worst have ever seen in my life. There are three about 28 year olds sharing a home next door. Not one has a high paying job, two are half employed or less and one has a low paying job. That same job paid more when I was his age, had that same job. One is from multimillionaire family. The job situation for young people that want a job, is terrible.

Is that what you are trying to say?

 

[g5000]

1. That is because the total population of people over 55 has been going up!

3. That is because the total population of people under 55 has been going down!

4. That is because the birth rate has declined after the Boom years.

Which means the retiring Boomers is the single most factor for the decline in LPR since 2008.

Again, you do not understand what the word "rate" means.

If there were 300 sixteen year olds one year, and only 100 sixteen year olds a few years later, that does not tell you if the labor participation rate has gone up or down.

What matters is the percentage of sixteen year olds who are working during each period.

If 200 out of 300 sixteen year olds were working and then only 20 out of 100 sixteen year olds were working, that drop in the participation rate has nothing to do with the fact there are less sixteen year olds.

What the above facts are telling you is that a smaller percentage of people are retiring at 65, and a smaller percentage of young people are going to work. Get it now?

Just because there are MORE people retiring than before does not mean a GREATER PERCENTAGE of older people are retiring. You need to understand the difference. The percentage is what affects the labor force participation rate.

By the same token the fact that more total people are retiring DOES effect the LPR no matter what the rate is, because you have MORE Boomers leaving the workforce than young people entering. The LPR is ALL workers of ALL ages, separating them into groups of unequal size makes comparing percentages meaningless. The only way you can say that % of one group offsets the % of another group is if the size of the 2 groups is the same.

The LPR is dropping because there are 3 million Boomers retiring from the workforce each year and that large number is not being offset by the total of young people and immigrants entering the workforce, no matter what the %.

Read the OP again. You are rehashing the oudated lump of labor theory which has been completely debunked.

 

[Darp]

On the LPR that is just one thing that is histrionically bad today. Lets look at everything.

Can any name just one thing, like unemployment rate (real or gov corrupted ones), economic growth rate, time to get a job in weeks, any important indicator that is truly good, clearly above average?

Here are two more charts for other things. How long it takes to get a job on average is maybe the most important in terms of human suffering.

 

[g5000]

On the LPR that is just one thing that is histrionically bad today. Lets look at everything.

Can any name just one thing, like unemployment rate (real or gov corrupted ones), economic growth rate, time to get a job in weeks, any important indicator that is truly good, clearly above average?

Here are two more charts for other things. How long it takes to get a job on average is maybe the most important in terms of human suffering.

I believe a great deal of the negative picture across several fronts is due to the ever increasing debt-to-GDP ratio. We are reaching a tipping point. The "end game", as it were.

Simple to solve:

1. Increase the Social Security and Medicare eligibility ages to 70 and index to 9 percent of the population going forward. We are living longer than our ancestors who set the age to 65, we should be working longer than they did. Only 5.4% of the population was over 65 when Social Security was enacted. Today, they are over 13%.

2. Ban all tax expenditures. We are spending over a trillion dollars a year on them. This directly contributes to our deficit and to our higher tax rates.

3. Reduce defense spending. We are spending as much in real dollars on Defense as we were during World War II, which also happens to be the only time in our history our debt-to-GDP was higher than it is today. We are not in a World War.

 

[The Rabbi]

On the LPR that is just one thing that is histrionically bad today. Lets look at everything.

Can any name just one thing, like unemployment rate (real or gov corrupted ones), economic growth rate, time to get a job in weeks, any important indicator that is truly good, clearly above average?

Here are two more charts for other things. How long it takes to get a job on average is maybe the most important in terms of human suffering.

I believe a great deal of the negative picture across several fronts is due to the ever increasing debt-to-GDP ratio. We are reaching a tipping point. The "end game", as it were.

Easily solved:

1. Increase the Social Security and Medicare eligibility ages. We are living longer than our ancestors who set the age to 65, we should be working longer than they did.

2. Ban all tax expenditures. We are spending over a trillion dollars a year on them. This directly contributes to our deficit and to our higher tax rates.

3. Reduce defense spending. We are spending as much in real dollars on Defense as we were during World War II. We are not in a World War.

No, debt to GDP is a symptom, not a cause. Gov't policies that discourage risk taking, innovation, and investment are to blame.

 

[g5000]

On the LPR that is just one thing that is histrionically bad today. Lets look at everything.

Can any name just one thing, like unemployment rate (real or gov corrupted ones), economic growth rate, time to get a job in weeks, any important indicator that is truly good, clearly above average?

Here are two more charts for other things. How long it takes to get a job on average is maybe the most important in terms of human suffering.

I believe a great deal of the negative picture across several fronts is due to the ever increasing debt-to-GDP ratio. We are reaching a tipping point. The "end game", as it were.

Easily solved:

1. Increase the Social Security and Medicare eligibility ages. We are living longer than our ancestors who set the age to 65, we should be working longer than they did.

2. Ban all tax expenditures. We are spending over a trillion dollars a year on them. This directly contributes to our deficit and to our higher tax rates.

3. Reduce defense spending. We are spending as much in real dollars on Defense as we were during World War II. We are not in a World War.

No, debt to GDP is a symptom, not a cause. Gov't policies that discourage risk taking, innovation, and investment are to blame.

There are only so many dollars. The more dollars you take out of the private sector to spend on government and servicing debt, and the more you devalue the dollar, the less resources available for innovation and investment.

 

[edthecynic]

The numbers clearly show the drop in labor force participation rate is the result of a smaller percentage of younger people getting work. If you don't understand the nature of the problem, you can't find the cause. If all you care about is a carefully framed short duration snapshot that only cares about blaming the current occupant of the White House, then you are a part of the problem. You are being a willfully ignorant rube.

Ed, I am not quire sure where you are coming from. Are you saying that the bad economy is eliminating jobs for young people? If so agree, the worst have ever seen in my life. There are three about 28 year olds sharing a home next door. Not one has a high paying job, two are half employed or less and one has a low paying job. That same job paid more when I was his age, had that same job. One is from multimillionaire family. The job situation for young people that want a job, is terrible.

Is that what you are trying to say?

I Don't know what you did to screw up the quote function, but that is not my quote.

The drop in LPR has nothing to do with the number of people getting jobs, but the number of people entering and leaving the workforce.

 

[The Rabbi]

I believe a great deal of the negative picture across several fronts is due to the ever increasing debt-to-GDP ratio. We are reaching a tipping point. The "end game", as it were.

Easily solved:

1. Increase the Social Security and Medicare eligibility ages. We are living longer than our ancestors who set the age to 65, we should be working longer than they did.

2. Ban all tax expenditures. We are spending over a trillion dollars a year on them. This directly contributes to our deficit and to our higher tax rates.

3. Reduce defense spending. We are spending as much in real dollars on Defense as we were during World War II. We are not in a World War.

No, debt to GDP is a symptom, not a cause. Gov't policies that discourage risk taking, innovation, and investment are to blame.

There are only so many dollars. The more dollars you take out of the private sector to spend on government and servicing debt, and the more you devalue the dollar, the less resources available for innovation and investment.

That is not true. Wealth is theoretically unlimited. When you discourage wealth creation, lower GDP growth, and increase government spending, esp transfer payments, you get higher debt to gdp ratios.
If we had seen GDP growth post recession in the historically correct 6% range we wouldn't be having this conversation.

 

[Darp]

Hi G5000,

I am a new poster, just getting the hang of this site. So was before not sure who was saying what. Think got it figured out now.

You started the thread. I disagree with your original premise that LPR with what is called in Wall Street the 4 most dangerous words, "Its different this time"

The LPR lines up with everything else, we are worst off than a recession, it is a depression, JMHO.

However do agree with the post am replying to. The Debt to GDP ratio is sapping our strength. It is impossible, with real money to solve. However we do not have real money. If all debts are repaid, there would be only coins and a few dollar bills left. Our current system is based on debt.

I could never understand when people said money would disappear if debts were repaid. It is so wild a concept.

But think about it, where does the money come from we borrow from banks? Its not deposits, think about it. Do you have more money in the bank than you are in debt for? Almost everyone has 10, 20 times more debt that bank deposits.

The book Creature for Jekyll Island explains it.

The money is counterfeited at no cost (sorta legally) by a private bank called the Federal Reserve then ordinary people have to pay it back with money they can not counterfeit.

That is how we can run trillion dollar deficits and there is someone to borrow it from. The Fed counterfeits it and you and I have to pay it back.

Cheers

 

[g5000]

No, debt to GDP is a symptom, not a cause. Gov't policies that discourage risk taking, innovation, and investment are to blame.

There are only so many dollars. The more dollars you take out of the private sector to spend on government and servicing debt, and the more you devalue the dollar, the less resources available for innovation and investment.

That is not true. Wealth is theoretically unlimited. When you discourage wealth creation, lower GDP growth, and increase government spending, esp transfer payments, you get higher debt to gdp ratios.
If we had seen GDP growth post recession in the historically correct 6% range we wouldn't be having this conversation.

Annual average GDP growth for the past 100 years has been 3.3%. Not 6%.

 

[edthecynic]

Again, you do not understand what the word "rate" means.

If there were 300 sixteen year olds one year, and only 100 sixteen year olds a few years later, that does not tell you if the labor participation rate has gone up or down.

What matters is the percentage of sixteen year olds who are working during each period.

If 200 out of 300 sixteen year olds were working and then only 20 out of 100 sixteen year olds were working, that drop in the participation rate has nothing to do with the fact there are less sixteen year olds.

What the above facts are telling you is that a smaller percentage of people are retiring at 65, and a smaller percentage of young people are going to work. Get it now?

Just because there are MORE people retiring than before does not mean a GREATER PERCENTAGE of older people are retiring. You need to understand the difference. The percentage is what affects the labor force participation rate.

By the same token the fact that more total people are retiring DOES effect the LPR no matter what the rate is, because you have MORE Boomers leaving the workforce than young people entering. The LPR is ALL workers of ALL ages, separating them into groups of unequal size makes comparing percentages meaningless. The only way you can say that % of one group offsets the % of another group is if the size of the 2 groups is the same.

The LPR is dropping because there are 3 million Boomers retiring from the workforce each year and that large number is not being offset by the total of young people and immigrants entering the workforce, no matter what the %.

Read the OP again. You are rehashing the oudated lump of labor theory which has been completely debunked.

Nothing has been debunked. There are 3 million Boomers leaving the workforce each year since 2010 and far less of any age entering the workforce. The Right actually made that very point after Bush was reelected in their push to privatize SS, now suddenly they have amnesia!

 

[The Rabbi]

There are only so many dollars. The more dollars you take out of the private sector to spend on government and servicing debt, and the more you devalue the dollar, the less resources available for innovation and investment.

That is not true. Wealth is theoretically unlimited. When you discourage wealth creation, lower GDP growth, and increase government spending, esp transfer payments, you get higher debt to gdp ratios.
If we had seen GDP growth post recession in the historically correct 6% range we wouldn't be having this conversation.

Annual average GDP growth for the past 100 years has been 3.3%. Not 6%.

Not post recession. Coming out of recessions the economy has a catch up effect and expands faster.

 

[edthecynic]

That is not true. Wealth is theoretically unlimited. When you discourage wealth creation, lower GDP growth, and increase government spending, esp transfer payments, you get higher debt to gdp ratios.
If we had seen GDP growth post recession in the historically correct 6% range we wouldn't be having this conversation.

Annual average GDP growth for the past 100 years has been 3.3%. Not 6%.

Not post recession. Coming out of recessions the economy has a catch up effect and expands faster.

And usually overheats, inflates and then bursts again. Boom and Bust over and over again.

 

[Plasmaball]

It is time to kick Junior out of the house and force him to make his own way in the world.

At the moment, he can kick back and stay with his parents and still get health insurance on their dime until he is 26!

this polls to well with people. try another angle

 

[Samson]

It is time to kick Junior out of the house and force him to make his own way in the world.

At the moment, he can kick back and stay with his parents and still get health insurance on their dime until he is 26!

I've wondered about this also, and after accessing the data you have kindly provided, come to the same conclusions.

Originally, my theory was that those older workers who had not found work had simply thrown in the towel, and begun waiting for SS checks to arrive. Not so.

My other theory was perhaps women had decided that entering the workforce was not such a great idea as it was in 1970. But the data shows both women and men contributing equally to declines in the participation rate.

Clearly, younger workers, regardless of gender or race, are to blame for the declining labor force participation rate, but I'm not sure they have a choice: Public Education has eroded, offering remarkably poorer quality during the past 20 years. Parents are just beginning to realize this as more and more send Johnny off to school and find that he needs to take YEARS of fundamental corses that will not count towards his degree program. Add to this the enormous cost of education and you generate millions of young people quite willing to be part-time students, part-time workers, and part-time adults.

Of course employers appreciate the part-time workforce, which requires far fewer costly benefits.

 

[Samson]

A lot of hay is being made out of the declining labor force participation rate by those who want to distract from the very positive job creation numbers lately. Therefore, it is a good idea to understand what the LFPR is and what it is not. It is also a good idea to understand the actual underlying causes instead of manufacturing a lot of wishful thinking over the matter.

First, the LFPR is defined as "a measure of the active portion of an economy's labor force."

There are some who believe the retiring of baby boomers has a lot to do with the declining LFPR. But when we break the rate down by age, that myth is exploded.

Take a look at this study by the Americans for Limited Government.

You will find the participation rate of the over-65 age group has gone up since 2003.



So what is actually causing the LFPR to drop?

The cause is that younger people are not going to work at the rate they used to.

Damn you wing-nuts are gullible!!!

The LPR is a worthless economic indicator because it is mostly effected by demographics, like the birth rate, retirement rate, immigration, etc., rather than economic health!!!

There are more people in the 55 and older labor force because the Boomers are aging. The youngest Boomers are now 50. There are less young people in the labor force because the birth rate keeps declining.

You suckers will swallow any bullshit you are fed as long as it is what you want to hear. 82% of Boomers are retiring by age 65, which comes to about 3 million Boomers leaving the workforce each year since 2010.

So, the 55+ participants are declining, but their participation rate is increasing.

This makes sence if the calculation of participation rate = # 55+ employed/ total # 55 persons.

It does not make sense if participation rate = # 55+ employed/ total # employed.

 

[Freewill]

If we raise the retirement age then health care certainity must be included.

This does not affect me: I have 100% VA.

No f...king wonder then that you drool over Obamacare doesn't effect you in the least Damn hypocrite.

 

[Freewill]

The problem with raising the retirement age. Yes people are living longer but bodies still wear out. Sure some bookworm who sits on his ass all day can probably work until they die. But a pipefitter? A brick layer? Besides, I don't believe those who are retired are figured into the job participation rate. Not sure if that is true or not.

 

[Samson]

Gee, the unemployment/underemployment rate for recent college grads is like 40%. This is because there are not entry level jobs for them. Why not? This wasn't a problem under Bush, despite your misleading graphs. Yet it is a problem under Obama. So who gets the blame here?

And usually overheats, inflates and then bursts again. Boom and Bust over and over again.

I do not see that the function depicted is dependant of political partisanship, or general economic conditions.