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By Stephen Pederson

Labor Participation Rate Change In America

The Old Work More and the Young Work Less

Hard Labor: Jack Hammer Operators

Low Labor Rate Participation

Between 2000 and 2010 there has been a peculiar phenomenon taking place.  US Labor Force participation rates are inverse to what common sense may would have one think.   Older citizens are increasing their involvement in the labor force, while younger citizens are decreasing their involvement in the labor force.    The Labor Force Participation Rate is defined as:

A measure of the active portion of an economy’s labor force. The participation  rate refers to the number of people who are either employed or are actively  looking for work.

The reason why this measure is so important is explained by

The participation rate is an important metric to note when looking at  unemployment data because unemployment figures reflect the number of people who are looking for jobs but are unable to secure employment.

The participation rate is important in analyzing the unemployment rate. Those  who have no interest in working are not included in the participation rate but  are included in the unemployment rate.

The definition implies that those not participating are not included in calculation of the unemployment rate.

The phenomenon that is worth noting is that between 2000 and 2010 the participation rate of those under 55 years old has decreased in all age categories, while the participation of those 55 years old and greater has increased in all age categories – as reported by the US Bureau of Labor Statistics.

A related fact that is also worth noting is that there has been a significant increase in US citizens 55 years old and older participating in the labor force compared to 1990 – an increase in participation by more than 33%.   This is expected to increase almost 10% more by the end of the decade.

In the same time period (1990-2010), those between the ages of 16 to 24 years have decreased their participation rates by 18%.    This is expected to increase to a 28% drop from 1990 by the end of this decade.

Both data points imply that same thing: the aged are working more and the young are working less and that this phenomenon has been trending in this direction for more than 20 years.

For more on the US Labor Force Participation Rate, see the link at the US Bureau of Labor Statistics (BLS).

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