A Failure to Participate - The Younger Generation
The December Employment Situation Report was released this past Friday. If you believe the media the report was a Goldilocks Report - Not too hot, not too cold, just right. The problem is that most of the analysis focuses on the Current Employment Statistics "worker" number, seasonally adjusted. Some people quote the Private Sector Number, such as the White House, or the Non-Farm Payroll Number, such as some in the press. (CES) The problem is that the Seasonally Adjusted (SA) CES data is the seasonally adjusted data. The seasonal factors used to convert the non-seasonally adjusted (NSA) data to the SA data changes from month to month, season to season, and year to year. The other problem with the Jobs Report is that the critical unemployment rate and participation rate numbers are generated from the Current Population Survey (CPS) data. That data includes the number of full-time jobs, part-time jobs, and unemployed workers, all of which have their own season factors, all of which change month to month, season to season, and year to year. When seasonal factors are manipulated FACTs (False Assertions Considered to be True) are created
It is easy to report on the report. It is harder to report on the data. The data is reported as advance numbers, revised the following month as preliminary numbers, and reported the following month as the final number. Those numbers, especially the SA versions of the CES and CPS data may be revised one or more times after the final number is reported.What has been discovered, so far, is that:
These articles are all updates of prior columns. These trends have been ongoing for years.One other trend to note is that We are seeing changes in the demographics of the workforce when you examine the Employment, Unemployment, Population, and Participation changes by age group.
Don't Blame Retiring Baby Boomers for the Dropping Workforce Participation Rate. Some pundits are saying that we are seeing a drop in the participation rate, as a country, because the Baby Boomers are retiring and are still being counted in the workforce population numbers. The problem is that by age groups those who are 60-64 years of age, 65-69, 65-69, 70-74, and 75 years and older are participating more now than during 2007. There have been some variation during the past few years. We are still seeing higher participation in these age groups than prior to the recession. Ironically, the participation rate of those 16-19 years of age have been decreasing - not the baby boom generation.
Jobs are Growing Slower than the Population for those under the age of 35. We are seeing some strange patterns. We are seeing negative participation for those under the age of 20. We are seeing nearly zero participation in the age group from 20-24. The Population to Jobs level is 3.56 to 1. If you look at the other age groups the population to jobs ratio is 1.336 to one. We have seen more jobs lost for the 40-44 year olds than we have seen the population drop.
What does all of this mean? What is the solution? We have a failure to participate. We are seeing real participation drop for those 35-49 years of age. The drop in participation for those 45-49 years of age is greater than the drop in the population. Some of this is due to an aging population. The problem is that if we look at the drop in the workforce population between 40 and 49 years of age, 4 million people, you might expect a 4 million increase in the workforce population between 50 and 59. That has only increased by 3.9 million The jobs level has changed by a -4 million and a positive 2 million for those age groups respectively.
We need to find work for people of all ages. The participation rate for those 16-59 years of age, by age group, have fallen. The participation rates for those over the age of 60 have risen. Are they working because they need the money or the insurance? We saw peak employment during the Summer of 2007. The changes we have seen during the past nine years have been substantial.
Act on Jobs. Make it easier for people to hire workers, train workers, insure workers.
It's the economy.
Unemployment Levels are Up Compared to December 2007, even December 2015. We have seen some declining numbers in unemployment as compared to December 2007. This is good. The problem is that we have more people who are unemployed now, between the ages of 25 and 39 than we had during December of 2007, in real numbers. We have more people who are unemployed now that December 2007 over the age of 55. We even have more people unemployed now than last December for those over the age of 55.
Employment Levels are Down Compared to December 2007 for those 35-54 years old.There has been some age shift between 2007 and 2016. Some people who were in the 35-39 year old age group are now in the 40-44 year or the 45-49 year age group. The problem is that the number of people working in the 40-44 age group is lower than 2007, as is the 45-49 year age group, and the 50-54 year age group. There has also been a huge shift in workers working into their sixties and seventies. We have 4 million fewer people working who are 40-49 years old. We have two million more people who are 50-59 years old working. We have 4.7 million more workers who are 60-69 years old.
Is Unemployment Up or Down? It depends upon your age and Gender. We know from prior articles that Men are not doing as well as women are doing with regard to the current recovery. The largest drop in the unemployment rate has been for those between the ages of 16 and 24 years old. Unemployment has been rising for those over the age of 50. These are people who want work and cannot find it.
Where are the 35-49 Years Olds? This is not the first time that this trend has been noted. We have 4 million people fewer working now, who are 40-49 years old, than we had during December 2007. We have 4 million more people who are 50-59 years old working. That is fine. This means that there has been some "age shift."Here's the thing: we have 10.6 million more people working between the ages of 60-69 years of age.We have 6.4 Million more people who are in the workforce population who are 70-75 years old.
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