A few days ago we disproved, in what we hoped would be the last time, any insinuation that the collapse in the labor force is due to demographics (a topic we had covered before) when we showed that it was just 10 short years ago that the Bureau of Labor Statistics itself was forecasting an increase in the overall participation rate – here we assume logically that America’s demographic profile was known to its labor market experts in 2004 – only to slowly at first, then very fast, revise it ever lower… and still it was unable to catch up to the unfolding gruesome reality.
Yet somehow, so called finance experts, econ PhDs, central planners and other ivory tower dwellers still refuse to let this topic go, and continue to reference the participation rate and demographics in the same sentence. So to truly end any speculation that the plunge in the labor force is due to “old people”, defined as workers 55 and over, retiring, here is a chart (which in an update of a post we did first in October 2012 and it took the rest of the media world only 14 months to catch up) of the cumulative job gains broken down by “young”, or those 16-54, vs “old”, those 55 and over.
Spot something wierd?
It seems that the “old” age worker group – that which is supposed to be bleeding workers to retirement – has had zero job losses since the start of the Depression in December 2007, while it was the “younger” workers who according to the BLS’ Household Survey, have hit the labor cliff and seen their number collapse, dropping as much a 6 million, and only slowly rising, with another 3.5 million jobs left to catch up before pre-recession levels are met.
In fact drilling down in the “young” worker category reveals that the most impacted group of workers is those in their prime working years: Americans aged 25-54.
And just to put the final nail in the coffin of this silly debate, first here is the Labor Force Participation rate by “old” workers, or those most prone to retirement, and where the Fed is now desperate to scapegoat the collapse in the Labor Force, compared to all other age groups. The chart, which shows that the “55 and over” worker group has now normalized its participation rate to pre-crisis levels, speaks for itself.
… and second: the employment to (civilian non-institutional) population ratio. The only recovery, if one may call it that, is for old workers.
So enough with all this “they are retiring” bullshit, and call it for what it is: millions of Americans of all ages, but mostly of prime working age, bailing out of the labor force by the millions because of equal or better opportunities elsewhere, opportunities which almost without exception are increasingly reliant on the ever more unsustainable and insolvent US welfare state.