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America's Shrinking Workforce?
By Paul Solman
Officially, this month's unemployment number is, in the words of the Bureau of Labor Statistics, "little changed" at 7.3 percent. The other headline number -- of 169,000 jobs added -- would have elicited an "eh" in my youth; a "meh" today. More meh still: a sharp 74,000 downward revision of the summer's job numbers. If last month's supposed 162,000 new jobs had been accurately reported, as per the downward revision, it would have been announced as 104,000, it turns out. That would have elicited headlines of doom.
On the other hand, our own hyper-inclusive U-7 number dropped dramatically -- to 15.7 percent. U-7 adds to the officially unemployed (11.3 million Americans), part-timers looking for full-time work and "discouraged" workers -- everyone who didn't look for a job in the past week but says they want one.
What's going on with U-7? Fewer unemployed Americans (by about 200,000); many fewer part-timers looking for full-time work: 334,000. And there are just as many Americans officially "not in [the] labor force" who no longer say they "currently want a job."
How to make sense of it all? Well, my own guess is that the baby boom retirement story, first tentatively told here last month, is becoming more plausible.
Here's what I wrote last month:
That was a story about July. So what happened in August? The population again increased by 200,000. And sure enough, the labor force declined -- by 300,000.
Statistically, this should come as no surprise at all. The baby boom started in 1946, a decent interval (nine months?) after several million soldiers returned from World War II.
U.S. birth rate (births per 1000 population). The red segment from 1946 to 1964 is the post-war baby boom. Courtesy of the Centers for Disease Control, "Vital Statistics of the United States, 2003, Volume I, Natality," via Wikipedia.
Add in immigration, and the year that ended in July of 1947 saw the biggest gain in the U.S. population, in percentage terms, since the early 1920s: nearly 2 percent or 2.7 million new Americans.
Now, age all the brand-new ones by 66 years, today's official age at which full Social Security kicks in, and you would have a baby boom retirement boom -- right about now.
As we've shown in our "New Adventures for Older Workers" multi-media package, while it's true that Americans are working longer, the majority are still retiring by the time they're 66. And so this month's numbers echo last month's: 10,000 baby boomers a day hitting 66 and thus, a shrinking workforce, with today's new Americans of working age, most of them immigrants, being sopped up by the ever-so-modestly growing job market.
In an interview I did just a few moments ago with economist Lisa Lynch, the dean of the Heller School for Social Policy and Management at Brandeis University, she agreed that retiring baby boomers are part of today's story. But she added that unemployment went up last month for young men, ages 25-34, with a high school diploma or less. Those men used to get jobs in construction or manufacturing, she pointed out, but no longer. And thus they sit idle.
Backing her up is a story from this week's Wall St. Journal, "Long-Term Jobless Left Out of the Recovery," though the story doesn't emphasize the extent to which the "long-term jobless" may be young people stigmatized by unemployment during the Great Recession and/or simply unemployable if they don't have a college degree.
A few further observations. One is that the steep drop in part-timers looking for full-time work seems to contradict a major criticism of President Obama's Affordable Care Act, which we're about to report on for the NewsHour. The criticism is that it will force employers to cut workers to part-time status to avoid paying for their health care. That would show up in the data as a surge of part-timers wanting full-time work. But at least this past month, it would seem, just the opposite happened.
More good news from the BLS: "The average workweek for all employees on private nonfarm payrolls increased." And in August,"average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to $24.05." That offsets an ominous dip in earnings that was reported last month.
LAST MONTH'S NUMBERS
Of course no reporter worth his or her salt can fail to include some bad news. And so, to end on a negative note, the jobs being added in this economy seem, once again, to predominate on the upper and lower ends of the pay scale.
"Retail trade added 44,000 jobs in August and has added 393,000 jobs over the past 12 months," the BLS reported.
"Employment in health care increased by 33,000 in August. Within the industry (however), most of the job growth occurred in ambulatory care services (+27,000)."
And yet, said Friday's BLS report, "employment in professional and business services continued to trend up (+23,000)."
"A Tale of Two Cities," Brandeis' Lisa Lynch calls it, a continuation of the troubling pattern we've seen for decades, frankly: jobs at the top, jobs at the bottom, and fewer and fewer in between, the so-called "hourglass economy," as dubbed by the late Bennett Harrison back in the 1980s.
Lastly, the view from elsewhere:
Wolfers followed that up with a post on Bloomberg, writing:
On Zerohedge.com, "Tyler Durden," writes, "Quality of August Jobs Added: Absolutely Abysmal."
Catherine Rampell, of the New York Times, analyzed the employment gains, writing:
The Wall Street Journal points out that Friday's data is at odds with more positive numbers out recently:
And, of course, all eyes were on Friday's numbers for an indication of what the Federal Reserve will do to its quantitative easing policy. Jeffrey Bartash reports for MarketWatch:
Neil Irwin writes on Washington Post's WonkBlog:
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