Labor-force participation drops to lowest level since 1977

[bananas]

Source: Market Watch


When the labor-force participation rate was last this low, Han Solo and Chewy were on an intergalatic quest for jobs.

The last time there was such a small percentage of Americans in the work force, “Star Wars” was in the theaters and Reggie Jackson was breaking home-run records in the World Series.

The labor force participation rate declined by 0.3 percentage point in June to 62.6%, the lowest rate since October 1977.

What accounts for June’s downturn is likely to be the timing of school graduations — the seasonally adjusted participation rate of 16-to-19 year olds dropped sharply, to 36.7% from 37.4%. That’s even though the raw numbers showed, quite logically as some schools ended, a big upturn in participation to 43.4% from 36.7%.

<snip>

But the bigger story in participation, the drop from Clinton-era participation in the 67% range, is a combination of baby boomers hitting retirement (the bigger factor) and other people who have given up trying to get a job.

<snip>

Read more: http://www.marketwatch.com/story/labor-force-participation-drops-to-lowest-level-since-1977-2015-07-02

[bananas]

1. All together sing, "Let's do the Time-Warp again..."

[bananas]

2. The labor force participation rate falls to a 38-year low

http://www.businessinsider.com/labor-force-participation-rate-falls-to-38-year-low-2015-7

The labor force participation rate falls to a 38-year low
Andy Kiersz
Jul. 2, 2015, 8:52 AM

The June US jobs report is out, and while the unemployment rate is down, part of the fall in unemployment came from a 0.3 percentage point drop in the labor force participation rate to 62.6%, the lowest rate since October 1977. Americans are considered to be in the labor force by the Bureau of Labor Statistics if they are employed or actively looking for work.

The labor force participation rate steadily grew between the 1970s and the 1990s, reaching its peak of 67.3% in 2000. During the 2000s, and especially since the Great Recession, the participation rate began to drop. Part of that drop was in response to the economic crisis that started in 2008, and part of the drop comes from demographic factors like the aging of the US population and the retirement of the baby boomers.


Business Insider/Andy Kiersz, data from BLS and FRED

[ArizonaLib]

3. Carter years vs Reagan years

Look at the growth during Carter years vs the Reagan years - another reason Carter was a better president than Reagan!

[Igel]

16. ??

In '77 it shows the increase that started in '76 continued (that would be under Ford). Same for '78. It basically flatlined in '79 and '80. Those conditions were passed along to Reagan.

Most of it was women entering the workforce. In some cases, because, as Carter was so proud to say, we were entering a post-industrial economy. Remember--this is when wages started to flatline, so any slack was taken up by having a one-breadwinner household become two-breadwinner household.

I finished college in January '81, about a week after Carter left office. I stayed unemployed for months, then got a temp job mowing yards and mulching at an apartment complex. Unemployed again, I got a similar job for a few months in the dead of winter. Then more unemployment, and a part-time job in a restaurant, which became nearly full time. This went on for about two years, then I got a real job. High inflation, high unemployment. But it started in '78. (Higher unemployment rate than in 2009. We hear that that batch of students faced the worst economy since something like 1981. Meaning, in other words, that 1981 was still worse.)

[Fred Sanders]

9. So the participation is actually higher than in the '70's? What is the fuss all about then?

Much ado about nothing...much ado needed to divert from 5.3%.

And individual stories are...individual stories.

[passiveporcupine]

11. This is one of those misleading charts that distorts the truth

If they showed it from zero to 100 instead of 56 to 68 percent, the curve would look a lot more gradual and be more honest. Shortening the time span makes it look a lot worse than it really is.

There is a truth in it, just a distorted truth.

[Lucky Luciano]

13. In this it is not too misleading. A 1% move is huge and should be viewed as such. nt

[Fred Sanders]

14. Sorry, there is no distortion since the numbers are all correct. Why scale to O? Try again.

[passiveporcupine]

21. We all have different perspectives

But condensing (skewing) the reference points on one axis, without doing the same on the other axis, makes the line look more extreme than it is in reality. This is a known strategy, used to emphasize someone's point.

I mentioned this in another thread. National Geo did a recent article on it. I'll see if I can find the link. Maybe you will believe them.

Here you go.

http://news.nationalgeographic.com/2015/06/150619-data-points-five-ways-to-lie-with-charts/

I'm not sure I'd use the word lie in this article, but exaggerate, yes. And that does not mean the information is not important. We need to learn how to look at things objectively. We are too used to the media exaggerating everything for ratings.

[Lucky Luciano]

12. It is a very legitimate fuss.

Women in the 1970's were not in the workforce like they are today. It is hard to compare now to the 70s without some clever adjustment for women wanting to be in the workforce.

Of course, you might argue that some women were forced into the workforce by high inflation of the 70s since families could no longer be supported by one income...and perhaps that uptick in participation rate was a symptom of the single income household being unsustainable. Some women joined the workforce because they wanted to as well though. I wonder what the breakdown was on women joining the workforce because they wanted to versus because they were forced to.

[Fred Sanders]

15. That is a new one...women were in the workforce in numbers well before the 70's.

Why are folks so desperate to hear bad news??

Try the fact the baby boomers entered the work force and are now leaving.

[Lucky Luciano]

17. Women rapidly increased their participation in the 70s.

I remember in elementary school in the late 70s early 80s when I felt like the only known d whose mother worked. All the other kids had mothers who stayed at home, brought cupcakes to the class on birthdays, etc.

The St Louis Fed has some data on this which shows the huge increase in participation by women. What I did not expect was the huge decline in participation by men over the same period. You are right about the baby boomer hypothesis partially, but the Fed is watching that participation rate carefully. This month's drop may have been the anomaly of a late ending school year (especially with snow days forcing an extension of the school year here in the northeast).

Some data:

http://m.research.stlouisfed.org/fred/series.php?sid=LNS11300002&show=chart&range=max&units=lin


http://m.research.stlouisfed.org/fred/series.php?sid=LNS11300001&show=chart&range=max&units=lin

[Doctor_J]

19. you don't think the trend from 2000 until now is a concern?

[Fred Sanders]

20. No, it is a natural consequence of demographic shifts, the long term trend is simply continuing....

same as every other developed and aging Western nation.

[MannyGoldstein]

4. Finally!

Now if we can just convince ALL of the Proles to give up working, we'll have no unemployment whatsoever.

Happy days!

Regards,

TWM

[PSPS]

5. Again, TWM, you have provided the obvious solution to yet another vexing problem.

[MannyGoldstein]

10. There is almost no problem that cannot be solved

By reducing the expectations of Proles.

[hollowdweller]

6. My wife and I both dropped out of the work force.

Last edited Fri Jul 3, 2015, 11:27 AM - Edit history (1)

We worked for the state and county gov't.

Basically we got virtually NO raises the last 8 years we worked due to shrinking budgets.

At the same time we had increased caseload and workload with no compensation.

Both of us had a change in management at the top in our agencies and they were pricks who micromanaged everybody.

We have nearly everything paid off. Our house. All but 1 of our 3 vehicles. We have a gas well on our property and I was able to trade 3000 hours of my accumulated sick leave for insurance for us for over 10 years thru the state insurance agency.

There was basically no reason to keep working. Work was more and less enjoyable. Pay had no chance of going up. Not even cost of living. Chance they might up the retirement age or cut back on benefits for people. They already did for more recent hires.

Bottom line is work really doesn't pay.

I know a LOT of people who quit their jobs (not gov't) due to drug testing. They liked smoking pot for recreation and their job didn't pay enough to make working worth quitting. On the other hand EVERYBODY I know who works in the mines, or for the railroad, or union construction workers continued working.Because they make good money.

Employers start paying more people will come back to work.

[fasttense]

8. You say you quit because you were making poor wages

Yet, you claim union folks quit because they made great wages. So which is it?

Hell if I had an oil well on my property, I'd quit my job too.

[hollowdweller]

18. My Bad. I meant the continued workng.

Everybody I know that makes good money works past the time when they could retire.

Thanks for catching that.

What I meant was a lot of people I know their salary is flat and their job keeps getting tougher they retire soon as they are able. Where people who are in unions, or work in the mines or anything that pays a decent wage they keep working.

So if they want more labor force participation they should raise wages and improve working conditions.

I don't have an oil well. Have a gas well.

Also don't get any money from it. In this area in the early 20th century gas people came thru and bought up the mineral rights for a pittance. However the one thing that they usually gave the landowner was free natural gas.

So we don't own the the mineral rights but we get 200,000 cubic feet of free natural gas per year. It's great but not like owning an oil well.

[fasttense]

22. Thanks Hollow for answering my questions

Oh it's not a oil well and you don't own mineral rights, but still good to get free gas.

I understand now thanks.

[jwirr]

7. I do think that this is misleading. I have never belonged to a Union in my life. Never had the

chance. I think support for the Union is not solely a matter of who is a member of a Union. I for one whole heartedly support the Union and recognize that they have done a great deal to help make my life better by simply doing what they do.