Last Call

I don't expect Republicans to actually understand economics, only to cherry pick statistics.  The latest nonsense is about the labor participation rate, or the number of people in the workforce.  It's shrinking rapidly.  Republicans claim it's "Obama's failed economic policies destroying the work force."  The rality is of course far more interesting and far more complex.  Yes, some people are being criven out of the work force by economic conditions.  But far more are being driven out by simple Boomer demographics.

Demographics have always played a big role in the rise and fall of the labor force. Between 1960 and 2000, the labor force in the United States surged from 59 percent to a peak of 67.3 percent. That was largely due to the fact that more women were entering the labor force while improvements in health and information technology allowed Americans to work more years.

But since 2000, the labor force rate has been steadily declining as the baby-boom generation has been retiring. Because of this, the Federal Reserve Bank of Chicago expects the labor force participation rate to be lower in 2020 than it is today, regardless of how well the economy does.
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.

That suggests, Maki and his colleagues wrote, that unemployment will not necessarily start ticking up again as the economy keeps adding jobs, as many people expect.

“Such an event has not happened in the past and we do not believe it will this time either,” they argued.

Yes, if labor force participation were as high as it used to be, unemployment would be in double digits.

It's not going to be that high again in our lifetimes, and that's simply due to Boomers like my parents retiring.  It's not a massive economic conspiracy, it's Boomers hitting 65, period.  The next decade will see tens of millions of new retirees.  The Bush crash simply drove them into retirement earlier than anticipated.  The labor force would be shrinking no matter who was President right now, and it will continue to shrink, period.

It's simple math.  But Republicans think you are too stupid to understand it.