The Vanishing Workers [The labor participation rate is back where it was in December 1981]

Wall Street Journal ^ | 05/07/2012

[SeekAndFind]

The economy turned in another lackluster month for job creation in April, with 115,000 net new jobs, 130,000 in private business (less 15,000 fewer in government). The unemployment rate fell a tick to 8.1%, albeit mainly because the labor force shrank by 342,000. This relates to what is arguably the most troubling trend in the April jobs report, which is the continuing decline in the share of working-age Americans who are in the labor force.

The civilian labor participation rate, as it's known, fell again in April to 63.6%. That's the second decline in a row and the lowest rate since December 1981. That's right—more than 30 years ago, longer than Mark Zuckerberg has been alive. The nearby chart shows the disturbing round trip the workforce participation rate has taken since 1980 and the precipitous drop in the last three years.

This decline is highly unusual coming out of a recession. Normally as hiring picks up, more Americans see more job opportunities and jump back into the labor force. That's what happened after the sharp recession of 1981-82, when the participation rate last hit 63.6%.

It rose smartly through the boom of the 1980s to a peak of 66.8% in January 1990. The rate dipped to 66% in the mild 1991 recession, but then rose again through the 1990s to a modern peak of 67.3% in January 2000 at the top of the dot-com bubble.

The last decade has never reached the same heights, though the participation rate did rise back to 66.4% in late 2006 and early 2007. The rate fell to 65.7% in July 2009 when the last recession officially ended, yet the distressing fact is that it has kept falling over the course of the next 33 months of ostensible economic recovery.

[SeekAndFind]

For those of you who are in their 50's and still want to work, here is some disconcerting news:

Economist David Malpass notes that Americans age 55 and older are a rapidly rising share of the working-age population, a trend that has historically meant a lower overall labor participation rate.

[SeekAndFind]

[SeekAndFind]

From the graph....

The percentage of Americans in the labor force has been declining for more than a decade ( so, we can’t entirely put the blame on Obama, although under him, the trend has ACCELERATED).

In January 2000, 67.3 percent of Americans had a job or were actively seeking work. By 2007, just before the recession, that had fallen to 66 percent.

In January 2009, the month Obama assumed the presidency, it was 65.7 percent. Since then, it has fallen to 63.6 percent, a level not seen since the first year of the Reagan administration.

[LucianOfSamasota]

If you pay people not to work, and tax people who work, don’t be surprised if you get unemployment. - Milton Friedman

[Venturer]

This recession we are in is doing nothing but getting worse, and only a damned fool would listen to that lying sack of crap in the White House and believe anything else.

[MNDude]

Ironically enough, if employment situation gets better, the unemployment rate will appear as higher as more Americans begin to look for work again.

[MrB]

This is such a fraud, and it is being perpetrated on our country by the left and the 0bama administration.

Official unemployment rate bad? Will it harm our re-election?

Manipulate the data!

[Common Sense 101]

The labor participation rate is back where it was in December 1981

Backward.

[GailA]

IT is a lot harder to find work if you are in your 50's, companies want your knowledge and experience, but want to pay you like you where fresh out of college.

[riverdawg]

The share of working-age adults on disability retirement has doubled in the past 20 years. DI has become the welfare program of choice for many people who cannot (or will not) find a job and have exhausted unemployment insurance and are not eligible for TANF.

[SeekAndFind]

1. If the size of the U.S. labor force as a share of the total population was the same as it was when Barack Obama took office—65.7% then vs. 63.6% today—the U-3 unemployment rate would be 11.1%.

Now, this doesn’t take into account the aging of the Baby Boomers, which should lower the participation due to rising retirements. But is that still a valid assumption given the drop in wealth since 2006?

2. If you take into account the aging of the Baby Boomers, the participation rate should be trending lower. Indeed, it has been doing just that since 2000. Before the Great Recession, the Congressional Budget Office predicted what the partipation rate would be in 2012, assuming such demographic changes. Using that number, the real unemployment rate would be 10.7%.

3. Of course, the participation rate usually falls during recessions. Yet even if you discount for that and the aging issue, the real unemployment rate would be 9.3%.

4. If the participation rate just stayed where it was last month, the unemployment rate would have risen to 8.4%.

5. Then there’s the broader, U-6 measure of unemployment which includes the discouraged plus part-timers who wish they had full time work. That unemployment rate, perhaps the truest measure of the labor market’s health, is still a sky-high 14.5%.

6. The employment-population ratio dipped to 58.4% vs. 61% in December 2008. An historically and alarmingly low level of the U.S. population is actually working.

7. And given that real disposable income has been flat the past two years, it stands to reason that many of the jobs being created are in low-wage sectors. Indeed, hiring in sectors such as retail and leisure has accounted for a whopping 40 percent of the jobs added over the past two years.

Whichever way one wants to look at it (if one were honest), The labor market remains in sad shape—despite Obama White House claims that it’s “continuing to heal”—and it is unlikely to improve much if the economy continues to grow around 2% or so.

[SeekAndFind]

RE: The labor participation rate is back where it was in December 1981

Backward.

_________________

But hey, Obama’s campaign slogan for 2012 is FORWARD !!

[GailA]

Charlie Daniels has a new movie coming out, here is the trailer

Behold a Pale Horse-Trailer
http://www.youtube.com/watch?v=oJORxHZl588

Agenda 21

[Dr. Sivana]

One should also keep in mind that in 1981, a larger percentage of women were still homemakers than in the present day.

[Ben Ficklin]

During recessions the informal underground economy grows and the informal labor force grows

As domestic workers have shifted into the underground economy they have displaced illegals who usually provide most of that labor and illegal immigration has slowed down.

[Vendome]

Fantastic!

I can watch reruns of Wall Street, Risky Business and Other People’s Money.

[Buckeye McFrog]

Ironically enough, if employment situation gets better, the unemployment rate will appear as higher as more Americans begin to look for work again.

a President Romney will need to lay-off worthless Federal workers at a very high rate in order to stay ahead of that curve.

Yeah, you're right. Doesn't have it in him.

[Sgt_Schultze]

That's a big worry there. If we get lucky and return Republicans to the majority in January, Mitter will have a very short window to accomplish mostly everything that needs to be done. Once the economy improves and the unemployment rate starts to trend upward, liberals will loudly trumpet the increase, the democrat press will mimic the liberal spin, and Republicans in Congress will likely be tossed in 2014.

If Mitt doesn't have all of the obamanation reversed by then, it will never be done.

This is our last chance.

[This I Wonder32460]

The unemployed who are participating in job training programs are not counted as unemployed. I know several unemployed people, who are participating in these programs. They have told me that there are many more people unemployed and uncounted as unemployed in this country, because when the unemployed are participating in job training programs and receiving assistance through these programs, it is not considered unemployment and they are not considered unemployed. Doesn’t make sense not to count them, in some capacity, as unemployed.

[ChildOfThe60s]

That's a big worry there. If we get lucky and return Republicans to the majority in January, Mitter will have a very short window to accomplish mostly everything that needs to be done. Once the economy improves and the unemployment rate starts to trend upward, liberals will loudly trumpet the increase, the democrat press will mimic the liberal spin, and Republicans in Congress will likely be tossed in 2014. n

Not to worry. The economy is going to crash and burn no matter who is in the WH, the tipping point has been passed already. The fact that Mitt will be Obama lite won't make a bit of difference.

Worry less about who gets elected in 2014 and more about whether there is an election. DHS is preparing for civil war; what do they know that we don't? Actually, many of us do know it, we just don't want to say it out loud.