Skip to comments.Baby Boomers Give Up, Drop Out of U.S. Labor Force
Posted on 02/12/2014 9:08:22 PM PST by smokingfrog
When Robin McLanes generation hit public schools in the 1950s, there were never enough classrooms or teachers to accommodate the bulge, she said. So shes not surprised about the latest shock that boomers are delivering to the U.S. economy.
People all around me, relatives and friends, are either retiring, or theyre finding its very difficult to find work anywhere from 55 on, said the 65-year-old, who lives in Portsmouth, New Hampshire, and retired from her job as a high school literacy specialist in June. For me, I was ready to move on.
The share of Americans in the labor force, known as the participation rate, is hovering around an almost four-decade low as the population ages and discouraged job seekers give up looking for work. Federal Reserve research shows retirees are at the forefront of the recent exodus, which blunts the impact of policy aimed at boosting the economy and workforce.
In the two years ended 2013, 80 percent of the decrease in labor force participation was due to retirement, according to calculations by Shigeru Fujita, a senior economist at the Federal Reserve Bank of Philadelphia. And while the number of discouraged workers rose sharply during and after the recession, the groups ranks have been roughly unchanged since 2011.
That tilts the debate on whether the participation rate can fully rebound alongside the improving economy, as retired workers are unlikely to re-enter the workforce, said Michelle Girard, chief U.S. economist at RBS Securities Inc., in Stamford, Connecticut. A tighter supply of workers means wage pressures would build faster than otherwise, something Fed Chairman Janet Yellen may watch as a leading indicator of inflation, Girard said.
(Excerpt) Read more at insurancejournal.com ...
I'm assuming that the "participation rate" is the number of people working divided by the number of people who could be working. I am assuming that "could be working" means "are between 18 and 65 years of age." So, increasing numbers of people retiring at 65 should have no effect upon the rate - or should even boost the rate, as retirees leave jobs which then become available to job-seeking youths (who, conversely, are then removed from the ranks of the unemployed).
What is my mistake in thinking here?
“When Robin McLanes generation hit public schools in the 1950s, there were never enough classrooms or teachers to accommodate the bulge,”
I was a new teacher in the mid fifties.
I had 39 students in my first grade class and no aides or assistants in those days.
The article does not really break down who is not working.
From what I have seen, the real losses are among the young AND the over 50’s. Ie, those who can’t get started and those forced into early retirement, often very early retirement.
Being 65 doesn't necessarily mean one should or has to stop workin'.
I’m one of those 55-year-olds who can’t find a job in the current economy, having been out of work for nearly two years. Assuming the Great Recession is coming to an end (and I have yet to be convinced of it), does any of this news mean work opportunities for me?
Baby Boomer are defined by people born between the years 1946 and 1964. Retirement age as defined by the BLS is 65
The leading edge of Baby Boomers just reached retirement age in 2011 (1946 + 65). So, the bulk of Boomers have not reached retirement age yet.
Many have been involuntarily retired (layed off) but the article is making it sound like Baby Boomers are en masse deciding to throw in the towel early. I bet that’s not true.
If the term "participation rate" were to be expanded to include the number of workers divided by the TOTAL NUMBER OF "peeps," then a sudden, large number of babies being born in a particular year (something having no bearing on the availability of jobs, or of labor) would have an enormous impact upon this "rate" - thus making the "rate" useless for economists / labor experts, etc.
The real answer is that the writer of the article used sloppy language and/or logic.
True, but for statistical purposes the working age population uses age 65 as the end of working years. Doesn’t mean many people don’t continue working past that age.
According to the U.S. Bureau of Labor Statistics, the labor force participation rate is the “share of the population 16 years and older working or seeking work.”
* you have to be actively looking for a job in order to be considered “unemployed”
The rate has increased dramatically over the past 50 years or so due to more women entering the workforce.
Must be a LSM Gerbilist ('tards all).
I did not plan on retiring. The economy did that for me. Nobody is hiring 60+ year old chemists, no matter what kind of experience & references you have. I had intended to work until I could no longer drive.
Lies, damn lies, stast......
Now I'm doin' the skiing in Mont. that the rest of America doesn't want to do.....
Lies, damn lies, statis.....
End result, no more multi-$1k federal income tax to social justice each year. True, I may have cleared a bit more SS each month if I waited, but just saying FUBO, you are getting no more from me was just too tempting. The lack of continued stress was worth it.
Too many years of the federal and quasi-federal program dollar funding chase along with the job insecurity it brings to small company engineering soured me to the point that I was glad to be done with it all.
Now I take great pleasure in (I think) contributing almost nothing to the welfare state. Not even drawing any IRA out until long after the Kenyan is gone. Peripheral taxes are hard to avoid.
I’m one of those who did not have my (government) contract renewed, can’t get work in my field, and have had to “retire” 7 years earlier. Fortunately, Mrs. VanShuyten has a very good job and can work until she wants to leave - no mandatory retirement age for her position, but without her, I would be in a much poorer situation.
If they keep telling us the economy is improving, the media is bound to believe it. Old people are helping to ease the difficulties of job attrition by retiring early. It wouldn’t be a crisis if there were new jobs for younger people, as opposed to the joys of idleness and reflection in the Obamaconomy.
lots of older people are retired because they have a fat pension...not so for a large number of us...luckily, I am still in demand and make good money at 60 and God willing, I’ll keep at it a few more years...
Civilian Labor Force Participation Rate - 25 to 54 years
2014-01: 80.9 Percent
Monthly, Not Seasonally Adjusted, Updated: 2014-02-07 9:41 AM CST
"After the labor force participation rate fell from 63.7 to 62.8 percent during 2013, we saw a slight recovery back to 63.0 percent in January. However, it remains at a very low level for all age ranges below 55 years old. The weak labor market also continues to dampen wage growth, as average hourly earnings have grown just 1.9 percent over the past twelve months," Hall wrote for the Mercatus Center.
On the other side are those such as senior fellow and director of Economics21 at the Manhattan Institute, Diana Furchtgott-Roth who, in a Jan. 14 piece for RealClearMarkets.com noted that "since 2000 the labor force participation rates of workers 55 and over have been rising steadily, and the labor force participation rates of workers between 16 and 54 have been declining."
Which is absolutely true. Since 2003, those 65 years and older have seen their labor force participation rate rise from 13.99 percent to 18.7 percent. Those aged 55-64 saw their rate rise from 62.44 percent to 64.36 percent, a recent Americans for Limited Government (ALG) study of Bureau data from 2003-2013 shows.
Meanwhile, participation by those aged 16-24 dropped from 61.56 percent in 2003 to 55.05 percent in 2013, and for those aged 25-54, it dropped from 82.98 percent to 82.01 percent.
So, does older Americans working longer, younger people failing to enter the labor force and the middle-aged dropping out account for the decrease in labor force participation?
Yes on all counts, the ALG study shows.
I did, as I posted, mostly because it was the Kenyan stripping NASA of funding that was going to kill my job. Had not happened just yet, but I had always been one step ahead of a layoff notice, and did not want to ruin my perfect record.
As I posted in another reply, depriving Obunghole of income tax from a $100k+ income to contribute to his welfare state just cemented my decision. After 40+ years of paying massively into the black hole of the federal money pit, they had enough of me.
Funny, but after I had pretty much cemented my plans (house sold, etc,) another company tried to contact me for an interview. Too late, my thoughts were already elsewhere and the train was gone.
I’m 61 and expect to be able to work for a while yet.
Just keep learning and expect change.
That Employment-Population Ratio, 25-54 yrs in the second graph is intriguing. Quite a drastic drop right as the Kenyan in elected.............
“I had 39 students in my first grade class and no aides or assistants in those days.”
In the 40s if there wasn’t 43 in the class they combined classes.
And good luck to you!
On the first day of my statistics class we were told that “statistics is the art of how to make figures lie and how to lie with figures and that the graph was the biggest aid to the perfect lie and that anyone that used the word statistics in this class would receive an F”.
You have my sympathy. I am skirting that edge myself. One of these years, unless the economy turns up.
Great information, very interesting.
It does look like the early retirement theory is busted.
I wonder if the 25-54 number can be further broken down.
I hadn't planned on retiring for about 3 more years, but finding anything other than a retail job with late hours and weekend work has been difficult. Thankfully, the wife's job is stable for now.
I learned statistics in grad school from the classic text of Reif : Fundamentals of Statistical and Thermal Physics. It’s the way the world works. You’re living it every second.
Those are very interesting numbers. Two observations:
The “65+” category is unbounded on its upper end. As a general rule, more people are staying healthier longer (or at least healthy enough to work). So, if one was to look at, say, persons 75 years old (only), it would stand to reason that their participation rate has increased — even if they are just the greeter at Wal-Mart. That would push up the participation rate for the 65+ age group.
Anecdotal evidence would seem to suggest that when it comes to persons in the 55-64 year group, many primary wage earners have lost jobs, and either have not found new work, have only found work at a lower wage, or have retired. However, their spouses are either continuing to work when they otherwise might have retired, or, in some cases the spouse has entered the workforce to give the family a second income to try to bring the total back up to what it previously was. Are there any statistics that might support or disprove this idea?
Mrs. and I haven’t seen a raise in 7 years. Any gains we’ve made were through working multiple jobs.
Baby boomers were born into unprecedented peace and prosperity. Will they have such good fortune to go out that way as well?
One thing that has changed in the last decade and a half, or so, is that someone’s age can be found on the Internet. Before that, employers were not allowed to ask your age. They could only ask if you were between 18 and 65. Before this happened, if you were young-looking for your age you could cut off part of your resume to make yourself look younger. Now there’s no point in even trying. Nothing shall be hidden. Everything shall be known. It makes a shambles of the age-discrimination laws.
One way around this sometimes is to request a temporary contract rather than an actual hire. This way, they get the benefit of your experience and better work habits without worrying about old-age issues. You don’t get health insurance, for example. You have to focus on the employer’s needs and why they would want someone in their fifties or sixties.
How to Lie with Statistics, Darryl Huff, W.W. Norton and Company, New York, NY, 1954.
Available as paperback, my copy is 53th printing. The quote comes from Disraeli.
Planned on retiring two years ago but they won’t let me, they just keep offering more money. I’m 64 this November and making more money than I ever thought I would. With the explosion in the Permian basin oil fields old experienced hands are hard to find. I sold my business last January and told my partner I’ll stay with his business until I hit 68 then I’m out for sure, my wife will be 62 and we’ll retire to our place in Capitan New Mexico. I take care of all the families production on a total of 42 square miles of ranches and thats going to hard to walk away from. I hired a young engineer about 3 years ago and hopefully I’ll have him ready by then.
Starting in 1971 I had an avg. of 39 in 5 different classes
Yep, right when Odinga was elected the lil youngsters did not think they needed to work anymore.
Pretty simple to see if you split the ages apart and plot it over. The young, dumb and full of c___ just figured the magic nigra was going to give them everything they needed.
Boy, I bet they are happy happy happy now....
I retired early on my own terms, last Fall, at age 52 after over 30 years in Hi-Tech Engineering.
I’ve saved & invested enough to earn it.
Everything is paid off; I owe no one even a Penny.
Part of it too is I’m sick & tired of so much of my earnings are going to excessive taxes.
My little part of “Starving the Beast”...
“I did not plan on retiring. The economy did that for me.”
They really should change the wording from people “retiring” to people “being retired”; it certainly would be more accurate. The fact is that people in your demographic often had slaries and benefits that companies wanted eliminated, and you were probably a casualty of that process. They’re continuing to move down the age/wage ladder to end up at a level where a young person can pay a share of rent and buy basic necessities; families and homes and no longer in the cards for younger American workers (in most cases).
There’s still a few “employed” demodummies that need to be in that line. (They live in the White House)
The real questions are
1. Are these workers being involuntary released.
2. Are they being replaced?
If they are being replaced, it may open up some opportunities for younger workers. If they are not, as I expect it to be, they are going to result in a higher demand for benefits with a lower number of people paying in.
Thanks to Obamas economy this boomer and her husband will be working for the foreseeable future.....
I think there are a lot of people working off the radar these days.
“I think there are a lot of people working off the radar these days.”
Me too. I haven’t heard a word about the underground economy in years. Someone somewhere must be tracking it. I’d bet that it is huge.
I am sure it can by race, sex, ethnicity, etc. The data exist.
Although not a mistake, assuming retired boomers are not in some manner employed or working is an error.
Some certainly are not, but there are others that find they must be doing something besides what they did for years and years.