An Objectivist Individualist

Are Retiring SENIORS Causing the WORK FORCE Participation Rate to Drop? This modified post is the consequence of some uneasiness I put about my earlier post and the perceptive objection created by a reader, Danny Beck. The labor involvement rate is the sum of those utilized and those positively looking for work divided by the civilian and non-institutionalized working age population 16 and over.

That ratio is usually expressed as a share. The labor involvement rate for men has fallen continuously since 1948, while that for women grew from 1948 to about 1996 and from then until 2008 was about constant. The full total labor participation rate was quite constant at about 60% from 1948 to 1972. It then rose until about 1990 and then was nearly constant until about 2001. Since that time the labor force participation rate has fallen. The fall essentially started with the dot-com recession and the labor participation rate never recovered.

More recently, the fantastic Socialist Recession has triggered it to fall quicker. There have been plausible suggestions a part of the reason for the drop in the labor force participation rate is basically because the industry leading of the infant Boomer generation has reached retirement age. The civilian labor force participation rates for three age groups of young people are shown from 2002 to 2011 for comparison with this for three age groups of seasoned people. That for the entire civilian labor force 16 years old or more is also shown.

The industry leading of the infant Boomers is the lower age part within the 65 – 69 age group, those 65 and 66. The labor force involvement rate because of this group has actually been progressively increasing since 2002! 5.85 on 24 July 2007, so many companies could have hired few starting employees in this generation even earlier that calendar year in anticipation of this increase in their labor costs.

There are fewer people in the three older age groups per calendar year than there are in the three young age groups. Specifically, there are fewer people of any age from 55 to 66, which are Baby Boomer years, than there are in the 16, 17, 18, or up to 29 years of age individual years. There are more potential employees entering the employment pipeline than are exiting it.

Unfortunately, those who may wish to enter the pipeline are not being hired. The root cause of the labor involvement rate is among these more youthful people. As I pointed out, a part of the reason is the minimal wage laws, which is not necessarily the Federal regulation. Many states have higher minimum wage rates than the Federal rate. 18 expresses have an increased minimum wage than the Federal minimum wage.

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These minimum income mandates greatly discourage employers from employing many young and inexperienced workers who will need considerable on-the-job training, especially when the worker is shows or under-educated proof possible work ethic problems. One more important reason behind not hiring young workers since 2008 is the data that employers must provide expensive medical care insurance to young workers as ObamaCare kicks in.

In days gone by, many young workers were not covered by company medical health insurance, which provided them an opportunity in their generally healthy youthful years to get enough skills a company would later supply them with medical health insurance coverage. Now the trouble looms prior to the knowledge and skill set of the young worker has matured enough to show his value. Finally, it costs money, which needs to be considered an investment, to train a new employee, if the worker is young and inexperienced especially. A lot of the teenagers hired are hired by small companies. No routine business downturn lasts so long.

Only government knows how to so mangle the economy that our great private-sector businesses cannot recover strongly in much less time. Much as was the case in the Great Depression, the government has pursued very wrongheaded socialist visions which have discouraged business investors, whether they are investors in equipment or in employed human being capital recently.

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