Where are our missing participants? The "Five Presidents" series was the first to promote a U-7 unemployment rate. The drop in the unemployment rate wasn't because there was a surge in employment under President Obama, it was because people were not participating. They were neither employed nor unemployed. They were "missing." If we had the same level of participation from those under the age of 30 now as we had during the pre-recession year of 2007 then there would be nearly 5 million more participants. It turns out that those over the age of 60 are "over-participating."
There are many ways to examine the jobs report data. Are full-time jobs or part-time jobs being created? Are certain sectors doing better than others? Are men finding work? Are women finding work? Are "kids" finding work? More people working means that more people can afford to spend money. More money spent means more workers are needed to service those customers. The monthly retail report has shown shows a surge in non-store retail for many months. The jobs report has shown a steady increase in the number of people working in the Trade, Transportation, and Utility Super Sector. There has been a fundamental shift in the economy since 2008. There has been steady improvement in the economy since November of last year. Older workers may be able to retire and allow younger workers to come into the labor participation fold.
It's the economy.
Record Levels of Workers over the age of 55. If we examine the worker data we can see that we have fewer workers between the age of 35 and 54 working now than we had during September of 2007. Some of this may be due to an "age shift." People who were 35-39 during 2007 are now between the age of 45-49. There were 16.754 million workers 35-39 during 2007 and there are 16.522 million workers between 45-49 right now. A similar decline is seen across those who were in the 40, 45, 50, and other age groups. If you feel lime the workforce is aging, it is. We have record levels of people working into their 60s and 70s.
The Workforce Population is Surging for those over 55. If people are not arguing that the workforce participation rate was falling because Baby Boomers were retiring, it was that the aging population was 'in the workforce' and not working. The growth rate in workers over 55 exceeds the growth rate in the number of people in the workforce population for those categories. They are working more and unemployed less. Older workers are participating in the economy.
The Employment to Participation Rate is up for those over 55 years of age. A rarely referenced number is the employment rate. Instead of what fraction of the participants are unemployed - what percentage of the population is employed? Those who are under the age of 55 are employed less than they were during the years prior to the recession. Those over the age of 55 are employed at a higher rate than they were prior to the recession. The people impacted 'the most' by the recession were those under 20 years of age.
Older Workers Working - Younger Workers - Notsomuch
There is more than one way to evaluate the data. It takes multiple days of analysis and multiple articles. Sometimes it requires a wholesales addition of new data sets or multiple revisions as the Current Employment Situation data is revised by the government.
The Retiring Baby Boomer Urban Legend. An Urban Legend that was proposed by the Obama Administration was that the decline in the participation rate was due to retiring Baby Boomers - those born roughly between 1945 and 1964. The problem is that some of these Workers might have retired during 2001 if there had not been the "Dot Com" Crash. It took a while for the Dow Jones Industrial Average (DJIA) to recover to 2001 levels - then came the Ike Spike Crash of 2008-2009. The DJIA was 11,722.98 on January 14, 2000. It was 11,796.98 on November 18, 2011. A 74 point gain over 11 years! No wonder the older worker has not retired.
While the stock market(s) rebounded the "Jobs Iceberg" took until 2016 to melt. Full-time jobs were replaced with part-time jobs. Lost full-time jobs were recovered, not added, for the majority of the Obama administration. The "Jobs Iceberg" was discussed in the article "The Part-time Jobs Iceberg" March 9th 2016. Full-time jobs mean "full-time" pay and "full-time" benefits. Full-time jobs also mean more time and money to spend stimulating the economy. Will people be able to retire now as the stock market approaches the 23,000 level?
Unemployment Levels are Higher for those over 50 than before the Recession. There is a big difference between the unemployment level - the number of unemployed workers - and the unemployment rate - the portion of the workforce who either are unemployed or employed who are unemployed. the U3 rate = U3/(U3+FT+PT.) There has been a huge surge in people over 55 who are unemployed and seeking employment. There has also been a huge drop-off since the worst of the recession.
The Workforce Participation rate is lower because younger workers are not participating at the rate they were prior to the recession. Workers under the age of 59 are participating less than they were prior to the recession. People 60 and older are participating more. Those 25-29 and 30-34 years of age are participating more than they were prior to the recession - it's just that their workforce population has grown faster than their participation, jobs or unemployed, so their participation rate is down too. The same could be said regarding those 50-54 and 55-59.
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