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Old 05-13-2014, 07:36 AM  
KC native KC native is offline
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About That Labor Force Participation Rate . . .

http://www.ritholtz.com/blog/2014/05...cipation-rate/
@TBPInvictus here:

On April 17, 2012, North Carolina Congresswoman Virginia Foxx stood before her colleagues in the House of Representatives and said (emphasis mine):
Ms. FOXX. Mr. Speaker, the March employment report continues to show us that the Federal Government has not been helping to create jobs in our economy. A Wall Street Journal editorial from April 9 highlighted a few examples from the report. Here is one extremely startling statistic:

The labor force participation rate–or the share of civilian population that is working–dropped again to 63.8 percent. In March, 2009, a month after the $800 billion stimulus passed Congress, the labor participation rate was nearly 2 percentage points higher, at 65.6 percent.
Interestingly, the Congressional Record has seen a hefty spike in mentions of the labor force participation rate over the past few years, and I can assure you they’re almost exclusively by Republicans and unflattering toward “President Obama’s America.”



And there’s this:

Here’s a search of “labor force participation rate” at foxnews.com (as of around 7:45 PM ET on May 8):


It’s good to know that Fox has been all over this important issue. The LFPR has been on the decline since about 2000, and I’m sure they’ve covered it very closely since it peaked. Let’s check their coverage during the Bush administration:


Hmmm. Only one story until President Blackenstein took office. Very curious.

More curious still is why any of this is so “extremely startling” to anyone. I have found research back to 2002 – and I’m sure I could find even earlier – that foretold of a decline in our LFPR due to our demographics which, unlike variables such as policy making, are carved in stone. Yes, to be sure, the decline was exacerbated by the severity of the recession, but this story was essentially written between 1946 and 1964 when the Boomers made their collective entrance.

For example, here is a chart from a 2006 piece The Recent Decline in the Labor Force Participation Rate and Its Implications for Potential Labor Supply:


So, eight years after that paper was written, how have things played out? Let’s have a look:


There’s also this, from the Center for Retirement Research at Boston College, from February of this year, which tells much the same story:


St. Louis Fed President James Bullard gave an excellent speech on the LFPR in February:
I have reviewed some of the available literature on this topic. My view of the literature is that carefully constructed empirical models of the hump-shaped trend in the U.S. labor force participation rate do a good job of explaining the data. These models suggest that the current participation rate is not far from the predicted trend. This means, in turn, that the cyclical component in labor force participation is likely to be relatively small.
Translation: It’s mostly demographics with a touch of recession.

Said BLS in its December 2013 forecasts (emphasis mine):
Of note is the fact that the drop in the labor force participation rate was just 0.6 percentage point during the 2007–2009 economic downturn whereas, between 2009 and 2012, since the end of the recession, the rate declined by another 1.7 percentage points. A major factor responsible for this downward pressure on the overall labor force participation rate is the aging of the baby-boom generation.
Various regional Fed banks have weighed in on the LFPR, all striking a similar tone. Bill McBride over at Calculated Risk has written about LFPR many, many times, most recently here.

Little of what is happening with the LFPR is newsworthy. Yes, some of it is residual weakness from the recession, but our demographics are what our demographics are. Sadly, those who are focused on deceitfully misrepresenting what is going on with the LFPR will probably have ammunition for years to come. That will not change the fact that they’re being deliberately misleading.

Sincere thanks to those authors and researchers who took the time to discuss their work on the LFPR with me. Your time and insight were very valuable and much appreciated.

Further reading (and for the purpose of memorializing these links):
Age-Adjusted Labor Force Participation Rates 1960-2045
Employment outlook: 2012–22
Labor force projections to 2022: the labor force participation rate continues to fall
Visual Essay: Long-term labor force
Projections of the labor force to 2050: a visual essay
Employment outlook: 2010–20
Labor force projections to 2020: a more slowly growing workforce
Labor force participation:
A behavioral model for projecting the labor force participation rate
Employment outlook: 2008–18
Labor force projections to 2018: older workers staying more active
Employment outlook: 2006–16
Labor force projections to 2016: more workers in their golden years
Long-term labor force
A new look at long-term labor force projections to 2050
Employment outlook: 2004–14
Labor force projections to 2014: Retiring boomers
Employment outlook: 2002–12
Labor force projections to 2012: the graying of the U.S. workforce
Consumer Spending
Consumer spending: an engine for U.S. job growth
Long-term labor force
A century of change: the U.S. labor force, 1950–2050
Employment outlook: 2000–10
Labor force projections to 2010: steady growth and changing composition

In addition the following are some interesting articles from different researchers on the labor force participation rate.

-Kansas City Fed http://www.kc.frb.org/publicat/econr...nZandweghe.pdf
-Richmond Fed http://www.richmondfed.org/publicati...over_story.pdf
-Journal of Economic Perspectives http://www.class.uh.edu/faculty/cjuh...s/30033665.pdf
-St. Louis Fed http://www.stlouisfed.org/publicatio...icles/?id=2419
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Old 05-30-2014, 08:34 PM   #121
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ok. thanks for clearing that up.

Boomers participation was at 80%, many of them retire....dropping the labor force participation rate. Although some dont retire as they age (increasing the precentage of those older 55 that are working), that amount is still far less than previously for the boomer generation.
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Old 05-30-2014, 08:52 PM   #122
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This is where you show how ****ing stupid you are again. Those 4 million workers aren't what is driving the rate.

Regardless, I've already stated that the 08-09 recession has had an effect on the LFP rate. The baby boomer effect is larger than the recessionary effect and that has been confirmed through the numbers that you don't understand.
So if I understand you right the 'rate' you speak of is more based on boomers that have decided to retire and pull out of the work force, is that what you're saying?
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Old 05-30-2014, 09:37 PM   #123
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So if I understand you right the 'rate' you speak of is more based on boomers that have decided to retire and pull out of the work force, is that what you're saying?
Not entirely.

The decline in the labor force participation rate is being dominated by boomers and their retirements. The recession has been a factor as well.
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Old 05-30-2014, 09:51 PM   #124
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Not entirely.

The decline in the labor force participation rate is being dominated by boomers and their retirements. The recession has been a factor as well.
Which is fine. So can you give any reasons why our future debt caused by our current and future retirements should not be a cause of concern? Can you point to any liberal policy that can avoid default? I mean other than just printing more money.
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Old 05-30-2014, 10:29 PM   #125
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Originally Posted by KC native View Post
The OP is chock full of papers that explain it.

We are going to have structurally lower labor force participation rates for the foreseeable future simply due to demographics (thanks again boomers). This has been discussed in economic circles dating back to at least 2002. Click the link and the OP (or you could actually just read the OP) has links to reports on this subject from a variety of people.

That doesn't explain all of the decline since 2006 though. The recession has definitely had an effect.

Pretending like this is a new thing or entirely attributable to the recession is nonsense. Making up factors because you want to make them up (like you just did) is nonsense as well.
No actually it isn't. Either you are really bad at understanding math or you are purposely trying to be obtuse on this.

I am NOT discussing the overall LFPR, nor do I care about the total numbers. I am talking about the % of people not working in the 25-54 age bracket. Period. Changing demographics explain SOME of the overall decline but neither you nor the OP has addressed the issue I am discussing. Why is the % amongst the 25-54 age group at an all time low?
Are you claiming that the small uptick in the 54+ group is stealing % points from the 25-54 crowd? Wouldn't that fly in the face of your argument that vast boomer retirements are causing the overall issue? (which is a no brainer, no one should be arguing the reality of the demographic shift's effect on the overall LFPR) You have yet to address this aspect of things but instead run from it and scream "LOOK AT THE OP!!!" when the OP doesn't address it either.


BTW making up factors? So you claim that disability abuse is NOT at an all time high? Are you seriously that ignorant? Have you not seen the Coburn report?
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Old 05-31-2014, 03:37 PM   #126
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No actually it isn't. Either you are really bad at understanding math or you are purposely trying to be obtuse on this.

I am NOT discussing the overall LFPR, nor do I care about the total numbers. I am talking about the % of people not working in the 25-54 age bracket. Period. Changing demographics explain SOME of the overall decline but neither you nor the OP has addressed the issue I am discussing. Why is the % amongst the 25-54 age group at an all time low?
Are you claiming that the small uptick in the 54+ group is stealing % points from the 25-54 crowd? Wouldn't that fly in the face of your argument that vast boomer retirements are causing the overall issue? (which is a no brainer, no one should be arguing the reality of the demographic shift's effect on the overall LFPR) You have yet to address this aspect of things but instead run from it and scream "LOOK AT THE OP!!!" when the OP doesn't address it either.


BTW making up factors? So you claim that disability abuse is NOT at an all time high? Are you seriously that ignorant? Have you not seen the Coburn report?
I misread your post and thought you were harping on the same bullshit that Putin's bitch was.

There are several factors that go into that. We've had the biggest recession since the Great Depression. Just prior to that recession, we overbuilt houses and commercial real estate. We're just now getting to where we need new homes and commercial buildings after working off the overhang.

And Yes, disability abuse is a factor as well.

No one is claiming that the employment picture is great, but it is improving and pretending like the sky is falling because Obama is the president doesn't tell us anything about what's going on. The employment picture would be the same even if Mittens had won the last election.
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Old 05-31-2014, 03:47 PM   #127
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I misread your post and thought you were harping on the same bullshit that Putin's bitch was.

There are several factors that go into that. We've had the biggest recession since the Great Depression. Just prior to that recession, we overbuilt houses and commercial real estate. We're just now getting to where we need new homes and commercial buildings after working off the overhang.

And Yes, disability abuse is a factor as well.

No one is claiming that the employment picture is great, but it is improving and pretending like the sky is falling because Obama is the president doesn't tell us anything about what's going on. The employment picture would be the same even if Mittens had won the last election.
I agree mostly with this except that I firmly believe had we not forced Obamacare and a number of other programs early in Obama's first term we would be in a better position. We'd still be in a crap position just not quite as crap.
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Old 05-31-2014, 03:52 PM   #128
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No one is claiming that the employment picture is great, but it is improving
my anecdotal subjective opinion is that its not improving.

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and pretending like the sky is falling because Obama is the president doesn't tell us anything about what's going on. The employment picture would be the same even if Mittens had won the last election.
somewhat agree, though I think Romney would have made his policy intentions and regulations clear so that buisnesses can act accordingly. Obama has waffled on many things (notably ObamaCare) which makes it difficult for buisnesses. That being said I wouldnt be suprised if Romney and Obama's policies are very similar.....heck Obama hasnt deviated too far from Bush's policies.
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Old 05-31-2014, 04:20 PM   #129
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I read more Boomers were returning to the workforce out of necessity. Afterall, the cost of living is rising under Obama's Fed.
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Old 05-31-2014, 04:20 PM   #130
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I read the first Quarter of this year for business was stagnant too.
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