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WP: Retirees Causing Higher Jobless Rate

From Obama’s praetorian guard at the Washington Post:

(Click to enlarge)

Jobs report shows effects of the incredible shrinking U.S. labor force

Published: May 4

If the same percentage of adults were in the workforce today as when Barack Obama took office, the unemployment rate would be 11.1 percent. If the percentage was where it was when George W. Bush took office, the unemployment rate would be 13.1 percent.

We almost thought the Washington Post had committed another random act of journalism over the weekend. But this is actually an attempt to blunt the reports on the tremendous decrease in the labor force under Obama by blaming it on the increase in retiring baby boomers.

That helps explain a seeming contradiction in the unemployment numbers — the rate keeps dropping even though job creation has been soft.

In April, the U.S. economy added a mere 115,000 jobs, according to Bureau of Labor Statistics data released Friday. In a normal month, that would not even be enough to keep up with new entrants into the labor market. But in this economy, it was enough to drive unemployment from 8.2 percent down to 8.1 percent, the lowest point since January 2009.

The explanation is a little-watched measure known as the “labor force participation rate.” That tracks the number of working-age Americans who are holding a job or looking for one. Between March and April, it dropped by 342,000. But because the official unemployment rate counts only those workers who are actively seeking work, that actually made the unemployment rate go down.

This is such an Orwellian measure, that if every working age American lost his job but decided to give up and not look for work, we would officially have no unemployment.

Critics of the Obama administration have been quick to seize on this as the real reason for the falling unemployment rate. In February, the Republican National Committee released a research note on “The Missing Worker,” arguing that “over 3 million unemployed workers have called it quits due to Obamanomics.”

Which is why the Post did this article. To defend Obama against these evil Republicans.

Economists say the story is considerably more complicated. For one thing, the trend predates President Obama. And while part of the story is clearly that the labor force is shrinking because the bad economy is driving workers out, another significant factor is that baby boomers are beginning to retire early — a trend that has worrying implications for future growth.

Nice try, Washington Post. But in fact, most of the conservative analysis of the workforce has mentioned the longer term trend and the impact of the baby boomers retiring. But even taking those factors into account the workforce participation rate is way out of line.

The percentage of Americans in the labor force has been declining for more than a decade.

And yet George Bush presided over a record 52 straight months of job growth within the last decade.

In January 2000, 67.3 percent of Americans had a job or were actively seeking work. By 2007, just before the recession, that had fallen to 66 percent. In January 2009, the month Obama assumed the presidency, it was 65.7 percent. Since then, it has fallen to 63.6 percent, a level not seen since the first year of the Reagan administration

The implications for returning to what economists call “full employment” are significant. According to calculations by Michael Greenstone of the Hamilton Project, if the labor force grows by 90,000 a month, then an economy creating 200,000 jobs a month would take about eight years to return to full employment. If the labor force grows by 125,000 a month — plausible if discouraged workers begin returning to the labor force — it will take almost 14 years to return to full employment

And that is the rate we are going under Obama. Which is a fraction of the number of new jobs under Reagan.

It’s easy to see why some workers would, in the current environment, get discouraged and stop looking for work altogether. There are about 3.7 job seekers for every available opening

But a number of economists are arguing that the recession is distracting people from the real story — long-run demographic trends that have nothing to do with the current economy. Baby boomers are starting to retire en masse, which means that there are fewer eligible American workers.

[S]ince 2000, the labor force rate has been steadily declining as the baby-boom generation has been retiring…

In a March report titled “Dispelling an Urban Legend,” Dean Maki, an economist at Barclays Capital, found that demographics accounted for a majority of the drop in the participation rate since 2002.

And what about the most recent downturn? Based on survey data, Maki found that about 35 percent of Americans who have dropped out of the labor force since the recession began in 2007 do want a job, but they have become too discouraged to fire off résumés.

That’s a sign of a weak labor market. But the other 65 percent are people who have left the labor force and do not want a job. The biggest chunk of that group seems to be composed of baby boomers, those 55 and older, who have decided to retire early.

Isn’t that convenient? Did Mr. Maki produce anything to substantiate this claim?

Still, let’s pretend for a moment that this is true, and that people are retiring like crazy. Where are all the people being hired to replace them? If so many people are retiring, shouldn’t there be a commensurate increase in hiring? Where is it?

The Post is trying to defend Obama’s jobs record. But their argument doesn’t even make sense. In fact, it only makes things worse

This article was posted by Steve on Monday, May 7th, 2012. Comments are currently closed.

10 Responses to “WP: Retirees Causing Higher Jobless Rate”

  1. AcornsRNutz says:

    Well, for what it’s worth, perhaps the BBs are retiring early becaue they can’t find jobs, which doesn’t seem to paint such a rosy picture when you think about it. My uncle, a dedicated child of the hippy 60s and staunch obama lover worked for a company which did a good deal of contrqact work for the DoD in the computer and tech field (which never stopped him raging against the bush war machine and it’s unjust conquests). Obama was elected and he was unceremoniously canned. Within a few months he said to hell with it and retired a little on the early side (can’t recall, 61-62 ish). He has blown through most of his private money and relies on the his wife’s money and the promise of the government teat in the form of SS. I would laugh at this gift of the magi-esque irony if he weren’t my family. However, the moral of hte story is even if the BBs are bailing from the workforce early, it isn’t exactly a sign of good things around the corner. Is anyone being hired to do the jobs they used to do?

    • River0 says:

      The collapsing economy gives Americans one more chance to become financially literate. Here are three truths that must be learned:

      Lesson one: The ability to produce goods and services that people want and need is real wealth. We must produce goods and services to increase national wealth and employ people. Paper money is merely a token that can flood markets and become worthless. Democrats do not understand this, and always end up damaging our productive capacity. The Asians do understand this thoroughly.

      Lesson two: Growing the federal government does not create jobs. It takes money out of the private sector and produces nothing. Eventually it drags down the whole economy. This is why the EU is sinking, just as we are.

      Lesson three: If something is expensive, that means there is a shortage of it. To lower the price, the supply must be increased. Whether it’s food, housing, a college education, or health care, the law is the same. Democrats almost universally deny this.

      There are other truths, but these are a good start.

  2. mr_bill says:

    Just a couple months ago, the usual liberal media suspects were telling us that older workers weren’t able to retire because of the real estate market, health care costs, loss of value in their 401k accounts. I did a quick web search and returned articles as recent as February from PMSnbc, NPR, USNews, Bloomberg, and Huffington Post.
    http://www.google.com/search?hl=en&source=hp&q=older+workers+not+retiring&gbv=2&oq=older+workers+not+&aq=0&aqi=g1g-v1&aql=&gs_l=hp.3.0.0j0i15.4204.9454.0.11001.18.14.0.4.4.0.297.2109.0j9j3.12.0…0.0.PQBk2LwVyvw

    PMSnbc even noted:

    Tough times keep older workers from retiring
    By Martha C. White
    February 20, 2012
    According to the Employee Benefit Research Institute, just over 40 percent of Americans 55 and older are still in the workforce, a figure that has been climbing steadily since hitting a trough of just under 30 percent in the early ’90s. “Certainly there are some who want to work,” said Craig Copeland, senior research associate at EBRI. More older workers have this opportunity because there are more jobs today that are physically undemanding, as compared to decades earlier.

    But experts say the main reason older employees are staying on the job is because they have no choice. “People have been telling us in our surveys that they’ve reevaluated the age they were going to leave the labor force in a large part due to the economic downturn,” said Sara Rix, senior strategic policy advisor at AARP’s Public Policy Institute.

    …Finally, there’s the issue of health insurance. Copeland pointed out that it’s prohibitively expensive for someone at the “traditional” retirement age of 55 to buy health insurance privately, even if he or she is healthy. “Health care coverage is tied to employment in our economy,” Rix said. “You really need to remain in the labor force until you’re eligible for Medicare.”

    http://bottomline.msnbc.msn.com/_news/2012/02/20/10435958-tough-times-keep-older-workers-from-retiring?lite

    If the media is defending nerobamacare, seniors can’t retire. If they’re defending nerobama’s pitiful record on job “growth,” then seniors are retiring at record levels. I’m sure the Ministry of Truth has re-written many articles like the ones I cited, or scrubbed them so they are consistent with the New Truth.

    • Rusty Shackleford says:

      Hm…..

      Gonna have to swap out my “It’s all Bush’s fault” for “It’s the seniors, dammit”, card.

      Those dang baby-boomers…..

      Born in ’61, I always have to suffer for the s**t they did to the bell-curve. Some of it is actually true. But according to Mark Twain:

      There are three kinds of lies. Lies, damned lies and whatever Obama says. (Sorry Sam, I had to update it)

  3. Anonymoose says:

    Expect this declining work force to also be spun into a cry for amnesty and more immigration to keep up the tax rolls and support the baby boomers in retirement.

    • Rusty Shackleford says:

      I’m thinking this “composite” Julia character’s last name is probably Ponzi. With Charles being her great-great grandpappy.

  4. Rusty Shackleford says:

    Just the same, it’s the “fart in an elevator” reporting. Only two people in the elevator and they both know who did it.

  5. tranquil.night says:

    “Did Mr. Maki produce anything to substantiate this claim?”

    Funny that a nervous sounding mischief-maker would call up Rush & insist listeners, specifically the retired & Tea Partiers (who’re all unemployed apparently) to go tell unemployment offices they’re looking for work to inflate the manipulated U3 numbers.

    Leftist scientific method is to come up with a hypothesis and then socially engineer (read: forge) the necessary evidence to make that theory conventional wisdom. ‘At ‘ere’s a Scientific truth of life.

  6. Rusty Shackleford says:

    “Economists say the story is considerably more complicated. For one thing, the trend predates President Obama.”

    THERE IT IS!

    Bush’s fault!

    Nary a day goes by where it isn’t that gawd-awful “W’s” evil doin’s and his ilk-dom of the CheneyHaliburtonEmpire.

    If they still made records I’d make one that skipped and just kept repeating “Bush’s fault * click* Bush’s fault”.

    It’s unreal.

  7. GetBackJack says:

    Involuntary Retirement does skew the numbers when the numbers aren’t used to being skewed over this much


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