Low Labor Participation Rate Is Not Due To Baby Boomers Retiring

Once again, we have another Employment Report, and once again, the unemployment rate gets a boost from people who have left, or are leaving the the workforce.  The lowest in nearly 4 decades.  Some would argue that if the labor participation rate was where it was at pre-recession, the actual unemployment rate would be over 10% and not at the 5% we see today.

Last March, the Chairman of the Republican National Committee blamed the "Obama economy" for the decline in labor participation.  However, a writer for FactCheck.org wrote this while arguing against that criticism of the President.

"economists say most of the decline, which has been happening for more than a decade, is due to demographics, including the trend of baby boomers reaching retirement age and deciding to no longer work."

The problem with the retiring baby boomer argument, is that its just flat wrong.  Once a year, the Bureau of Labor Statistics issues a report on labor participation rates.  The latest for 2014 shows this:

Simply, the labor participation rates for older Americans are rising; indicating a willingness to work past the early retirement age of 55 years or the normal retirement age of 65 years. The real losses have been for those of the working ages 16 to 24 and 25 to 54; with the 16 to 24 year olds being hardest hit.

Enough with the lame baby boomer argument for losses in the labor participation rate.

References:

Employment Situation Report for November 2015: http://www.bls.gov/news.release/pdf/empsit.pdf

Civilian labor force participation rate by age, gender, race, and ethnicity: http://www.bls.gov/emp/ep_table_303.htm

FactCheck.org:  Declining Labor Participation Rates: http://www.factcheck.org/2015/03/declining-labor-participation-rates/

Participation Rate Lowest in 38 Years - CNS News: http://www.cnsnews.com/news/article/susan-jones/record-94610000-americans-not-labor-force-participation-rate-lowest-38

Over 38 Million Men Not in Labor Force, Reaching New Record Low: http://opportunitylives.com/over-38-million-men-not-in-labor-force-reaching-new-record-low/

Decades Of Labor Participation Wiped Out and Continuing to Decline

In 1997 -- 14 years before the supposed wave of retiring baby boomers were to start hitting the economy -- the number of workers participating in labor peaked at 68.1%. This after having climbed from a low of 57.9% in 1965.  Compared to that high in 1997, the current participation rate has fallen nearly 8% to today's level of 62.8%; now equaling levels not seen since 1978.  And the current decline -- post recession --  has significantly accelerated since 2007.

In a recent report release by the Center for Immigration Studies (CIS), almost all of the newly created jobs in this country since 2000 have gone to immigrants; both legal and illegal.  During that same period, 58 million natural born citizens simply dropped out of the workforce.

So, how do 58 million workers survive not working?

Many find filing for Social Security disability insurance a new way to get a lifetime of pay without having to work.  As a result, we now have a record 11 million on disability; or, approximately, one out of every fourteen working age citizens collecting insurance.  Because of poor economic times, 36 percent of 18-to-31 year-olds or more than 21 million are living at home; most not working.  This, too, is the reason that gang membership has swelled to 1.4 million; up from 1 million in 2009 and 750,000 in 2000. The welfare rolls have been exploding with 15% of the population or 46.5 million in poverty and many eligible for full benefits including income.  Others aren't working because of college or the military.

The declining trend in labor participation is putting this country at risk economically. As the participation rate declines, it means that fewer and fewer of us are paying taxes and paying towards programs like Social Security and Medicare; and, subsequently, more and more of us are living off of the government instead of assisting it.

Essentially, the decline in labor participation also means that America is becoming a poorer country with incomes either stagnant or declining while the cost of living increases at a faster pace.  This is evidenced by the fact that median incomes in the U.S. pretty much peaked in 1998; exactly one year  after the 1997 peak in the participation rate:

During that same period where incomes were in decline, the cost of things we buy went up 48%.

America must wake up to the fact that the country is in decline with too few people working.  We are becoming the very essence of the European economies that have high unemployment; high taxes; unmanageable government debt; and, low business profits.  You can find all kinds of reasons for this: an increasingly poorly educated workforce with the good jobs either going overseas or being handed to better educated immigrants on work visas; or, because of increased government regulation that accelerated during the Clinton years and are even more oppressive under Obama; and/or, too high taxes on businesses that continue to make our companies less competitive in a world marketplace and which, prevent both the volume and quality of jobs being created.  At the same time we need to reassess all of our government assistance programs to insure that people who can work do work.

References:

Civilian Labor Force Participation Rate: http://research.stlouisfed.org/fred2/series/LNU01300000

Disability Beneficiaries Hit New Record: http://cnsnews.com/news/article/terence-p-jeffrey/10996447-disability-beneficiaries-hit-new-record

June 2014: Civilian Workforce Participation Rate: http://www.bls.gov/news.release/empsit.a.htm

America’s Shameful Poverty Stats: http://www.thenation.com/article/176242/americas-shameful-poverty-stats

A Record 21.6 Million Millennials Living With Parents: http://www.huffingtonpost.com/2013/08/01/millennials-live-with-parents_n_3690870.html

2009 Gang Statistics: http://www.statisticbrain.com/gang-statistics/

2014 Gang Data: http://www.fbi.gov/about-us/investigate/vc_majorthefts/gangs

Median Income Falls For 5th Year, Inequality At Record High: http://www.huffingtonpost.com/2013/09/17/median-income-falls-inequality_n_3941514.html

Year-to-Year U.S. Inflation Calculator: http://www.usinflationcalculator.com/