Sunday, November 10, 2013

Declining Labor Force Participation Rate And Baby Boomers

One aspect of the slow growing recovery following the recent recession has been anemic job growth. A consequence of the weak job growth has been a steady decline in the labor force participation rate. Some economist and strategist attribute the declining participation rate to the retirement of baby boomers. However, as noted by the orange line in the below chart, the participation rate of baby boomers (55 years and over) remains at near the same level equal to that at the end of the recession. Consequently, data does not support that a declining participation rate is the result of these boomer retirements.

From The Blog of HORAN Capital Advisors

Interestingly, total job openings (JOLTS Survey) indicates companies desire to hire. Job openings are approaching the level prior to the recession. The question becomes why are these positions going unfilled. Is the government making it too easy for the unemployed by providing extended benefits through the various government assistance programs? Or are the benefits not the correct ones, for example, is job retraining made available to the unemployed? The second chart below shows the dramatic and continued increase in the SNAP or food stamp program. These government assistance programs are certainly necessary during recessionary times; however, it is possible the extended availability of these programs can discourage the unemployed from looking for employment.

From The Blog of HORAN Capital Advisors

From The Blog of HORAN Capital Advisors


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