Reclaiming Common Sense

The number of workers 40-54 years old are down from 2007 levels. Part of the decline is an "age shift" in the demographics. Those who were 35-39 years old during 2007 were 40-44 years old during 2012 and 45-49 years old during 2017. If it seems as if there are a considerable number of "pensioners" working right now, it is because their population has grown from 17 million to over 20 million since 2007.If you compare the number  of 45-49 year olds during 2007 to 50-54 year olds during 2012 you would see a decline in population. This age shift decline is present  for 25-29 year olds through 65-69 year olds between 2007 and 2012. This is why we had the slide in unemployment - there was a slide in participation.

Participation matters. If you are employed or unemployed you are participating. We could have 6 million unemployed workers and 154 million workers or 154 million unemployed workers and 6 million workers and we would have the same level of participants.The participation rate has dropped for those 16-29 years of age since 2007. July 2007 was the peak pre-recession job month with the most combined full-time and part-time jobs, according to the Current Population Survey data.  Participation has also declined for those 40-64 years of age.  Some of this is age shift.  Everything is relative. There are "negative" unemployed workers between the age of 30-39 and 65 years of age and older. There should be "more unemployed" workers or fewer workers working in these age groups if we were to be at the same demographic mix of workers, using  the participation rates we had during 2007. There has been a shift in the percentage of workers and the percentage of population. The shift started with the 40-44 year olds, moved to the 45-49 year olds, then the 50-54 year olds.

We have an aging workforce. Depending on how you look at it the older workers are either boosting or lowering the participation rate. Some of the drop in workers may be a hangover from the Great Recession. Some of the drop in the workers 35-44 years of age may be because they are rearing children and are stay at home parents. Some of the shift is that people are aging out of their age group every 5 years. The drop in the participation rate is a combination of a drop in workers and a drop in unemployed workers. The rise in participation in older workers is an increase in these people working and in being unemployed. 

 We have a problem because people are not looking at the data at a deep enough level. The number of workers surged last month. They could have been reported as surging even more than they have. Unemployment is astonishingly low. Participation is even more remarkable - it is so low by historic measures,. The participation rate is rebounding.  We still have millions of "missing participation" that are forcing the effective unemployment rate higher than is being reported. We will have to absorb these workers before wages will really start to rise.

It's the economy.

The number of "unemployed workers" has fallen since 2007 for those under 55 and rise for those over 55. Once again, some of this is age shift. Younger workers tend to have a higher unemployment rate because they are still in high school, college, or graduate school. They are not actively seeking work so they are neither employed or unemployed.This thing to note here is that there are older workers out of work, searching for work.

The November Employment situation report was released two weeks ago. The data was solid. The reporting on the data was modest, at best.

  • "Stellar November Jobs Report" revealed one of the best October to November non-seasonally adjusted worker growth rates since 1980 with a skewed seasonal factor.
  • "Five Presidents after Ten Months" revealed that President Trump has added more full-time jobs than any other President, since Reagan, during their first ten months in office. The growth rate for President Trump was slightly lower than than President Clinton. President Trump has overseen an increase in Full-time jobs and a decrease in unemployed workers.
  • Male workers have been impacted more by the Great Recession than women. "Amazonian Recovery: Women are Winning" detailed how women have added more full-time jobs then men, and men have added more part-time jobs than women have added.
  • Some sectors have recovered from the Great Recession while some have not. "November Sector Surge in Workers" details how we have yet to see a recovery in Construction, Mining/Logging, Manufacturing, and Information Technology (IT.) These are traditionally male dominated sectors.

This column regularly writes articles regarding the aging workforce. The jobs and unemployment can be broken down by full-time and part-time jobs, my male and female workers, and full-time and part-time jobs, and by age group.

Workers are on the rise - not for all age groups, and not back to pre-recession levels. Part of the change is a change in demographics. There are more older workers. There are more older workers working.