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EPI: Retirements Don’t Explain Jobless Figures

From The Hill:

Study: Baby-boomer retirements don’t explain unemployment figures

By Ian Swanson – 05/24/12

Baby-boomer retirements are skewing the nation’s unemployment rate, but not enough to disguise a weak economy, according to a new report.

The left-leaning Employment Policy Institute (EPI) says the slow exit of baby boomers is a factor in the declining jobless rate, and its overall conclusion is that the economy is still quite sick

Republicans and EPI certainly don’t agree on much. For example, EPI has long argued that the government should embrace expansionary policies to generate more demand for workers. Republicans, at least in recent years, have strongly opposed government stimulus proposals.

Hilariously, Wikipedia claims that the EPI is a fiscally conservative front group.

EPI estimates only one-third of the drop in the national labor participation rate, which measures the share of working-age people who either have a job or are jobless but are actively seeking work, is related to baby-boomer retirements and other structural changes to the workforce.

If the rate is largely dropping because the weak market has made people give up searching for a job, it bolsters the Republican argument that Obama is presiding over an extraordinarily weak recovery and that the fall in the unemployment rate is basically a mirage.

What’s more, if the economy heats up, one could expect the unemployment rate to rise as people come back to the workforce

None of which is happening, of course.

The last jobs report found the labor participation rate had fallen to 63.6 percent, its lowest in more than a decade. Labor participation in the United States had been rising for decades as women entered the workforce…

The warning in EPI’s report is that “missing” workers are unlikely to enter the labor market until job prospects are strong enough that they will not face months of fruitless job searching.

When the workers do return, EPI expects the unemployment rate to rise. No president since FDR has been reelected with the unemployment rate above 8 percent.

In order to get a sense of the “real” unemployment rate, EPI’s Heidi Shierholz points to the employment-to-population ratio for workers aged 25 to 54 — so-called “prime-aged” employees.

Nearly 80 percent of those workers were employed before the recession. Now the figure is closer to 76 percent

And, as we noted in our earlier piece on the ’employment to population’ ratio, this is after almost three years of Obama’s ‘recovery.’

This article was posted by Steve on Thursday, May 24th, 2012. Comments are currently closed.

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