But Bloomberg reported last month that a UBS economist estimates that half of the labor-force participation rate decline is due to the aging of the workforce. How much of the other half is due to the policies of Barack Obama, as Pethokoukis would have it, or George W. Bush, under whom the recession and financial crash started, is a debate for another day.
This points to a larger blind spot in the press: That much of the economy is dictated by demographics. And it’s not just the press. Here’s the UBS economist Bloomberg quoted:
“There’s a cyclical downturn in the labor force participation rate, but there’s also a structural one related to the baby boomers that a lot of Wall Street economists are missing,” Matus said. “When you add the two up, you’re seeing this very dramatic drop in the participation rate. It might not bounce this time around.”
We like to think that stuff happens because we implemented policies that worked or backfired: X policy is the reason we have Y consequence. I guess it makes us feel good to think that what we’re doing matters more than it really does.
Sometimes there are forces out there larger than tax cuts or stimulus bills.
I think you young-uns can also retire at 62, as far as Social Security is concerned. They've raised the *full* retirement age, but not the minimum age. Please check me if I'm wrong, but correct yourself if I'm not.
Retirement benefits by year of birth
There are a lot of other complexities to that data. First of all, the dramatic upswing in 60's and 70's are also women entering the work force - it isn't ALL baby-boomerism. Secondly, part of that down trend is blatant ageism - people over 50 -- and especially over 60 -- who want to work cannot get hired because of ageism. People over 50 also lose their jobs in favor of younger workers to lower expenses or to trim pension benefits.
Also, I don't think the post-war increase in the birth rate quite looks like a python. It looks more like some of that, but also a return to a more normal birth rate following the great depression. Just wait til the recent trend in birth rate becomes apparent in the data-- there was a jaw-dropping decrease in babies born in 2008 and 2009. Whether that's going to level out or increase as the economy recovers remains to be seen.
#1 Posted by James, CJR on Fri 4 Mar 2011 at 03:44 PM
Ohhh my kingdom for an editor.
...the dramatic upswing in 60's and 70's is also women...
#2 Posted by James, CJR on Fri 4 Mar 2011 at 03:47 PM
What does someone have to do to get a correction here?
You said, "But Boomers, unlike us Gen Xers, can retire at 62 and take Social Security. "
That's wrong.Gen Xers can retire at 62. I provided a definitive link, just above.
#3 Posted by James, CJR on Fri 4 Mar 2011 at 07:14 PM
You're right, James. Gen Xers and everyone else can still take early retirement at 62 even though our full-retirement age is higher.
Excellent catch.
#4 Posted by Ryan Chittum, CJR on Sat 5 Mar 2011 at 01:35 PM
Much appreciated, @Ryan.
#5 Posted by James, CJR on Sat 5 Mar 2011 at 03:23 PM
I think a lot of us boomers are going to work until they pry the keyboards from our cold, dead hands. We've lost money / income / promotions in the downturn and have to stick it out longer than we thought we would.
#6 Posted by Late Boomer, CJR on Wed 9 Mar 2011 at 01:18 PM