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The author needs to be better informed. We are almost back to the level of 1980. And retirement has nothing to do with it. When you look at the 25-54 year age group, the prime period for employment, you find a much different picture.

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.

That Employment-Population Ratio, 25-54 yrs in the second graph is intriguing. Quite a drastic drop right as the Kenyan in elected.............

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.

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?

I think there are a lot of people working off the radar these days.