Charts on employment

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Submitted by moneymaker on August 5, 2017 - 12:04pm

Do these 2 charts jibe?

https://data.bls.gov/timeseries/LNS11300000
https://data.bls.gov/timeseries/LNS14000000

Not really sure how the unemployment rate can be going down when at the same time the labor participation rate is also going down.

Submitted by SK in CV on August 5, 2017 - 12:17pm.

More people of non-working age in the population. More (under 18, (or under 22 if they're in college) and not actively looking for a job, more full retirement age retirees, more early retirement retirees) as a percentage of the entire population. Much of the decline in the participation rate over the last decade has been a result of shifting demographics as opposed to a structural change to employment rates. The participation rate peaked around 1990 as all baby boomers entered the work force and the stay-at-home-moms all but disappeared. It was flat for a decade until 2000, when the oldest baby boomers started to retire early. We're about 10 years away from the youngest baby boomers hitting retirement age. The current trend (since 2000) is (and was) predictable based on demographics, irrespective of changes in the economy.

Submitted by moneymaker on August 5, 2017 - 4:00pm.

Good explanation SK in CV, and I thought maybe there were just more hippies around than I thought.

Submitted by no_such_reality on August 7, 2017 - 7:36am.

moneymaker wrote:
Good explanation SK in CV, and I thought maybe there were just more hippies around than I thought.

SK is incorrect. The labor participation is measured by those working divided by those over 16 and looking for work or working.

If you are 15 you do not factor, if you are 40 and not looking for work (actively) you do not count, if you are retired, you do not count. If you are in school and not working, you do not count.

The LP can fall when people stop looking for work. A falling LP actually pushes the UR down as the looking for work numbers fall. Conversely, a strong economy can have increasing unemployment rate as the LP rises as more people return to work.

Also keep in mind whether or not your look for work also doesn't count for the unemployment rate if you've been unemployed more than 52 weeks. That was the 1994 change.

Submitted by harvey on August 7, 2017 - 7:39am.

no_such_reality wrote:
SK is incorrect. The labor participation is measured by those working divided by those over 16 and looking for work or working.

LOL, most of us learned in 5th grade or to check our answers when the teacher gives an open-book take-home test.

The labor force participation rate is the percentage of the population that is either employed or unemployed (that is, either working or actively seeking work)

https://www.bls.gov/bls/cps_fact_sheets/...

SK is absolutely correct. The decline is simply because there are less people that want to work, and a big component that group is baby boomers retiring.

NSR's completely wrong definition is a right-wing alternative fact that was invented to counter improving jobs numbers during the Obama administration:

http://www.factcheck.org/2015/03/declini...

Submitted by no_such_reality on August 7, 2017 - 7:56am.

LOL, good catch, I wrote it wrong.

I gave the formula for the employment rate.

The kick is still the definition of unemployed. The official labor force is employed plus unemployed. My outline of not counting as unemployed stands. Unemployed does not count over 52 weeks or not looking.

and I really need to quit posting before coffee. So yes, SK was right.

Submitted by harvey on August 7, 2017 - 8:50am.

no_such_reality wrote:
LOL, good catch, I wrote it wrong.

I gave the formula for the employment rate.

The kick is still the definition of unemployed. The official labor force is employed plus unemployed. My outline of not counting as unemployed stands. Unemployed does not count over 52 weeks or not looking.

What you're saying is the employment to population rate, which is a different number. That charts have different values but roughly the same shape.

If baby boomers retiring is the reason, why is 55+ labor participation increasing?

It's a metric, the definition hasn't changed for decades, and it is consistent. There will be always be different viewpoints on how to interpret these metrics, but to have any value the interpretation has to be consistent and not relative to what party is in the white house.

The participation rate used to be an obscure statistic, mainly because it has limited value outside of the context of other data. By itself, it doesn't tell us much.

The unemployment rate is the best single data point available for measuring the health of the labor market. It's not perfect but it's the best we've got. It's been used for decades, again consistently.

But the modern media needs a quick talking point - a "one quick number to show the other side sucks" piece of data because people have short attention spans and they need their confirmation bias right now.

When the unemployment rate was steadily improving during Obama's term the right needed a way to label Obama as a failure so they dug up the Labor Force Participation Rate and started throwing out misleading interpretations of it to show that "Obama really is not creating jobs."

Those who didn't like Obama simply accepted it, repeated these non-facts, and eventually this obscure statistic became part of the right-wing mythology that permeates American culture.

It's not surprising that it ended up here, again.

Quote:
If baby boomers retiring is the reason, why is 55+ labor participation increasing?

Since 2014 it has been decreasing:

https://www.bls.gov/emp/ep_table_303.htm

It was increasing before that ... why? Who cares?

I'm not really interested in digging into the details as they aren't actionable for anything that matters to me. I'm certainly not going to use the metric to rate the performance of a president, which seems to be the underlying agenda for everyone that brings it up.

Submitted by moneymaker on August 7, 2017 - 8:30pm.

Some of the poorest countries have high labor participation rates so by itself it is not significant, however I think not counting people because they aren't employed or actively seeking work (quit looking) is kinda BS. Now is the drug dealer on the corner employed (he's not paying taxes) depends on one's point of view I suppose. Are under employed people considered employed, probably. I would like to be unemployed but I can't afford to be!

Submitted by harvey on August 7, 2017 - 8:54pm.

Again, it's just a measurement - one of many that economists collect. There's no right or wrong or BS in the measurement, only how it is interpreted or misinterpreted.

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