Spot The Labor Force Collapse Culprit

Tyler Durden's picture

A few days ago we disproved, in what we hoped would be the last time, any insinuation that the collapse in the labor force is due to demographics (a topic we had covered before) when we showed that it was just 10 short years ago that the Bureau of Labor Statistics itself was forecasting an increase in the overall participation rate - here we assume logically that America's demographic profile was known to its labor market experts in 2004 - only to slowly at first, then very fast, revise it ever lower... and still it was unable to catch up to the unfolding gruesome reality.

Yet somehow, so called finance experts, econ PhDs, central planners and other ivory tower dwellers still refuse to let this topic go, and continue to reference the participation rate and demographics in the same sentence. So to truly end any speculation that the plunge in the labor force is due to "old people", defined as workers 55 and over, retiring, here is a chart (which in an update of a post we did first in October 2012 and it took the rest of the media world only 14 months to catch up) of the cumulative job gains broken down by "young", or those 16-54, vs "old", those 55 and over.

Spot something wierd?

It seems that the "old" age worker group - that which is supposed to be bleeding workers to retirement - has had zero job losses since the start of the Depression in December 2007, while it was the "younger" workers who according to the BLS' Household Survey, have hit the labor cliff and seen their number collapse, dropping as much a 6 million, and only slowly rising, with another 3.5 million jobs left to catch up before pre-recession levels are met.

In fact drilling down in the "young" worker category reveals that the most impacted group of workers is those in their prime working years: Americans aged 25-54.

And just to put the final nail in the coffin of this silly debate, first here is the Labor Force Participation rate by "old" workers, or those most prone to retirement, and where the Fed is now desperate to scapegoat the collapse in the Labor Force, compared to all other age groups. The chart, which shows that the "55 and over" worker group has now normalized its participation rate to pre-crisis levels while that of younger workers has tumbled to levels not seen since the 1970s, speaks for itself.

... and second: the employment to (civilian non-institutional) population ratio. The only recovery, if one may call it that, is for old workers.

So enough with all this "they are retiring" bullshit, and call it for what it is: millions of Americans of all ages, but mostly of prime working age, bailing out of the labor force by the millions because of equal or better opportunities elsewhere, opportunities which almost without exception are increasingly reliant on the ever more unsustainable and insolvent US welfare state.

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GetZeeGold's picture



I'll take Obamacare for a thousand Alex.

BandGap's picture

A couple more years and I'll get to participate in the recovery!

Keyser's picture

The reason oldies are around is because they are the only ones that hold the keys to the kingdom with respect to business process, accountability, continuity, work ethic, dedication, etc... I could go on, but you get the idea. The younger generations have grown up flitting from one job to another as job-security is a thing of the past and there is little to no loyalty to an employer, whereas the old goats have a sense of loyalty and dedication not found in the younger generations. I can't count the number of people I have hired and fired over the last decade. Not because they weren't competent, but basically over work ethic. 

Shocker's picture

Thanks ZH, the charts basically say it all.

The labor market is hurting, no recovery

Layoff List:


DaveyJones's picture


The Battle of the Bongs

This game will be smokin

Global Hunter's picture

Pacific NW favoured by 17 in that one

Occident Mortal's picture

The problem is that retirees saving pots are practically worthless to the money markets, as long as markets can gorge on QE... 401K's are surplus to requirement.

Until annuity rates increase significantly no amount of pension savings is enough to retire comfortably.

QE has created a much bigger problem in the pipeline which is the huge skills vacuum in the 18 - 30 demographic. These people are already indebted to the hilt with crushing student loans that they cannot even default on.

There is now a productivity cliff baked into the pie. This millenial cohort is never gonna generate the tax revenue the government needs when they reach their 50's.

TruthInSunshine's picture

It's a good thing Obama didn't go with his original idea for his Campaign Slogan in 2011;

"Welcome to the goodie room!"

czardas's picture

I have a hard time understanding this.  If even the casual investor had bought the safest and easiest market product (an index) their portfolio would have exploded these last three years. Maybe that is the problem I've run into frequently - ideological investing, assuming that because one thinks the market shouldn't be doing well is won't be doing well.  If the Fed manipulation has taught us anything it is that "certain" trends do not emerge as we think they should.  Our debt is as much a cultural phenomenon as a financial or political one - the idea that because our government and its citizens can live beyond their means for a while, it's now OK for everyone to do so regardless of savings or income. 

Silver Bully's picture

'I have a hard time understanding this.'


What's to understand? This is only confusing if you think this is an actual market. It is not. The Fed controls this 'market'.The question and answer has always been the same . . . if you thought the Fed was gonna pump the market, simply go buy some stawks and let them pump you up. The reason why no one (or at least most traders/investors) has done this are two-fold:


1) Too risky. How do you know when to get out? Did anyone think the Fed would monetize like they have the past 3-4 years? I would say 99% would answer no. And even if you did, again, when do you get out? Because once the Fed stops pumping, those hawt stawks turn to ash overnight. Remember, you are front running the House. If you don't know know when to get out, they will carry you out on a stretcher. Fool me once, Mr Greenspan . . .


2) You have to have money to begin with. The retail investor still hasn't recovered from the Lehman Event and real estate implosion. How do you expect anyone to take advantage of the dubious rise in equities in the first place?

So it is all a moot point. Just don't be confused by it. This is why people are angry at the Fed . . . they have tried to corral people into a highly risky equities 'market' which they (the Fed) control. The Fed can pull the plug on this whenever they want. And the only people who will gain by it are the ones who have already booked their winnings, or the ones the Fed protect.

Try to mark that top in yer trading belt. I dare ya.

boogerbently's picture

In the interest of "equality" and "social justice" I'm willing to take my FULL Soc. Sec retirement now, at 60, and step down from my job.

G.O.O.D's picture

Lol, better have a shitload of dingdongs and milk for the crowd.

DaveyJones's picture

Imagine if the players took part in their legislation

No one would tackle

I'm not paying $500 for flag football

Occident Mortal's picture



Aren't a lot of people leaving the under 55 cohort and joining the over 55 cohort?


Via that process called "aging".

Oldwood's picture

About the same amount of those dying in the over 55 cohort?

Surly Bear's picture

Not in the labor force does not mean they are not working. They are underground, so to speak.

Muppet Pimp's picture

Lets just say that the younger generation has had an uphill climb to come to terms with hard work when raised by liberal media and government schools due to both parents working full time.  #WomensLibFTW

Ying-Yang's picture

I'm over 55.... and I RETIRE every night.

Then I wake and go to work.

CheapBastard's picture

However, the Little People seem contant with their 0.01% yields, global competition, flood of immigrants competing for jobs, stagnat wages, sinking benefits, and so on.

So nothing will change.

Silver Bully's picture

'So nothing will change.'

What do you mean 'content'? You think they have a say in this? You think Babyboomers had a say in whether or not they paid into Social Security and Medicare? You think the entire nation had a say in Obamacare? The libs wanted singleplayer, not this worst of both worlds crapfest we have now.

No one does anything while merely being threatened. Words mean nothing to our politicians. Nothing changes because it will take blood, YOUR BLOOD (and the blood of your kids) to correct these problems. So nothing will change until the pain actually becomes worse than dying, or worse than being forced to kill your own kids with your bare hands.

THEN (and only then) will things change.

ebworthen's picture

"The Battle of the Bongs"

lol...yeah...Doritos and Dominoes couldn't be happier!

A Nanny Moose's picture

If you like your job, you can keep your job.

midtowng's picture

Those charts don't tell the entire story.

Retiring workers do indeed account for about a third of the decline in labor force, but only a third.

OceanX's picture

How long do you think until the newly retired need to go back to work?

OceanX's picture

How long do you think until the newly retired need to go back to work?

Uncle Remus's picture

What is this "retiring" of which you speak?

WillyGroper's picture

Waaahhhh, NOT SFUZZI!!!

I see the Oral of Omaha is canning some FOL & DQ workers.

Fricken parasites.

i_call_you_my_base's picture

Why should anyone have loyalty to a faceless corporation that has no loyalty to them? I made a concerted decision in my life not to have loyalty to my employers because I know they would fuck me the first chance they got.

Headbanger's picture

Keyser:  I agree with you and just look at the above post for proof!

I'm in that 60 something age now and I busted my ass for every employer that hired me and worked every single hour I could (there's no time like over time!) and I stayed on while many others were laid off when things got bad.

And I know the difficulty employers have hiring competent people  from a shooting buddy of mine who owns a local hardware and lumber store who has begged me to work for him cause "it looks like these kids are writing with their feet filling out a job application!"



exi1ed0ne's picture

Maybe your friend hasn't heard of the axiom "You get what you pay for."  Perhaps he should look at his offer if he isn't getting qualified applicants.

kralizec's picture

New to the real business world I see...

Paying someone more wages isn't going to draw better applicants, it will only draw in more applicants...the pool being what it is I would hire the 40-50 something former manager with a work ethic and a need to care for his family over the 20 something smart-ass know it all that loafs around IMing his Emo girlfriend and Twittering with his slacker buddies on his iPhone all damn day and acts mortally hurt if you ask him to do something!

GeorgeHayduke's picture

Pay is only part of it. Maybe it's not always the employee, but the manager and the way he manages that's the reason for the work he gets out of people. Or maybe the culture of the company.

kralizec's picture

Cannot discount the dick factor, can be worse in family run enterprises sometimes, but the job market being what it is firing a dick and finding a replacement shouldn't be that hard.  Been with outfits with bad reps/culture...word gets out, only the stupid, insane and desperate work those places...and then they usually go under.

Ballin D's picture

That might be a thoery in the boomers' flawed model for the business world.

Welcome to the real world.

Its been demonstrated that workers that are underpaid work less than the equitably paid (who work less than the overpaid).  When youre hiring kids out of college paying less than a year of university, of course they arent going to work hard. But youd rather blame the kids you just hired than the managers (including yourself) who continue to make poor and uneducated decisions.

boogerbently's picture

The underpaid are historically undereducated (both at home and at school).

They don't understand "delayed gratification".

Their vision only extends to their next paycheck, at best. Many can only see to their next beer at shift end.

exi1ed0ne's picture

Nope, not a newbie here.  I also said offer rather then pay on purpose.  Perhaps the friend is an asshole - turned down plenty of lucrative offers in my day because the employer had a history of being a shithead to their employees.  Maybe it's part time, maybe there are odd hours, maybe there is just no qualified people because he does business in da hood.  No idea, could be none or all of these factors because this list is far from exhaustive.  However if their views are anything like yours, good help will catch on to that pretty quick and stay far away.  All I know is:

1) The friend gets nothing but mouth breathers applying

2) The friend needs to look at WHY they are attracting nothing but sub-par and fix it, rather then blame the applicants for their lack of attracting poor candidates.  (Honestly, it's like calling a girl bad names because they don't want to get with you rather than making yourself more likable.)

Having said that, most people are TERRIBLE at hiring good people.  I've hired old and young, experienced and newbies and never had an issue.  Not only do I spend a lot of time with them up front to determine if they are a fit but I also communicate with them regularly after the hire and get to know them as people.  Then again I want loyal opposition and don't feel threatened by subordinates that possess more knowledge which is far from the norm.  Most people want ass kissers and people they don't feel threatened by when all is said and done, and no one age demographic has the corner market on being a bad employee or playing the "hiring game" by false advertising.

GeorgeHayduke's picture

Gee exi1edOne you can't go around throwing the responsibility for these problems back on the poor business owners. It's always the wage slaves who are at fault. The slaves should ALWAYS appreciate what the Man offers without complaint. Obedience, loyalty and a willingness to sacrifice health, happiness and any kind of life outside of work are expected of the slave so that profits may be maximized. After all, profit is the ONLY reason a business exists (according to the propaganda that so many here seem to buy).

Oldwood's picture

Its everyone's fault. Until at least recently there has not been a huge barrier for anyone to become self employed. It has been a choice for most to either be employed or an employer. If you not not want the responsibility of the employer that is fine, just don't bitch about being a fucking dependent. Modern society is breeding dependency and when you can't find enough of it with a job, you can always fall back on the government. I have been a small time employer for the last 35 years, never employing more than ten at a time. Nice and up close and personal. You get to see it all and no big bad corporate bogyman to push it off on. It is getting worse and you can try to take that to the bank.

11b40's picture

Same here.  In business since 1976 & I maxed out at 16 people about 12 years ago, but changing business conditions have reduced us to 4.  For me, however, there was not a lot of turnover...but, I offered solid commissions to the independent reps, and a great benefit package to the office employees that included medical and pension and profit sharing.  I had to let people go in 2008 that had been with me for over 20 years.  I can't even start to describe here how much our industry has changed, mostly for the worse.  

How much I despise the corporate world would be hard to describe, too.  If I were starting again, I would do 2 years at a tech school, then maybe transfer & do 2 more at a regular college just for the benefit of gerneral education, and immediatley start working toward starting my own business with the skill set I had learned.  It might take a few years and some sacrifice, but long term I believe it's the way to go.  Own your job & love your work.

Excursionist's picture

It's a local hardware and lumber store!  How much do you think the rocket scientists working there should get paid?

I don't think it's unreasonable to expect minimum wage labor (never mind more expensive labor) to have a basic command of whatever the functional language is in the area, be able to stitch together a semi-coherent written sentence and actually work (sober) when expected.

G.O.O.D's picture

Hell you must not have been around in the 70's. NOONE was sober and we built skyscrapers and passenger jets.

Global Hunter's picture

A lot of working class people now aged late 50s and 60s were laid off the last few years and were given a pension buyout rather than the pension they thought they'd been working for.  Companies all the time are reneging on their promises to their loyal employees most of whom are the older people you describe, furthermore they have real issues finding new employment after having been laid off.  I've not found many businesses worthy of me giving my life and being loyal to in this environment (where older loyal workers are lied to and let go with a pension payout when they were working partly towards the promise of a pension).

I have faith things may change and dream of finding a job/business I could by loyal to, until then, loyalty isn't worth it, I've been laid off too many times due to lack of work after having been early for every shift and quietly going about and completing the work I was asked to do and trying to get on well with everybody else (ie not because of my work ethic), all for jobs not very much higher than minimum wage.

GeorgeHayduke's picture

Same line of thinking I've followed in my life. I didn't steal from them or do anything malicious while working for them. But I never had any loyalty at all. When I had office jobs I never had pictures of my family or wife on my desk, maybe a nice scenery picture for day dreaming, but nothing personal. And most all of them still fucked me first chance they got.

nodhannum's picture

I call BS.  I can remember a number of times that colleagues told me that the way to get ahead is to job hop and move every three to four years.  Then when they can their asses canned at fifty something they come bo-hooing about the mean corporation.  Everytime you quit a job and move to another outfit for "more money" you are firing the company!  So you can do it to them but they can't do it to you.  What's sauce for the goose is sauce for the gander.

ImpotentRage's picture

Agreed. I have exactly as much loyalty to them as they have to me. Which is to say, keep them around as long as they are beneficial, drop them as soon as they are not.

TheSkipper1967's picture

I know what you mean.  I still remember the analysis I did for Sr. Mgmt after the company laid off 20% of the workforce and payroll expense only dropped by 13%.  Well when you lay off people that only averaged 30K then you dont get the same bang for your buck.  Those same Sr. Mgmt (President, CFO, VP Sales, VP HR, VP Marketing) were all eventually let go for someone else when they couldn't turn the company around.  The company was eventully sold to private equity and that is when I left.  Almost to a person that private equity firm has replaced the old employees that came with the sale.  The only thing the President and CFO carried about ( I reported to the CFO at the time) was the BONUS they would get at hitting the profit numbers after laying off a lot of people.  That experience changed me a great deal.  I worked with many of those people and kept the list of names who were to be let go.  I am ready to go back to Log Cabins and hunting for my food. 

Dewey Cheatum Howe's picture

You old farts caused the problem also at the same time. While you were so busy working you forgot to be parents and let the state raise your children.....

And this is why we have what we have now.

JohnnyBriefcase's picture

I do enjoy how people bitch about "younger generations" yet conveniently seem to forget that they raised them.


"All they do is stare at their phones/computers!"


And who bought those for them so they didn't hve to be bothered?

Dewey Cheatum Howe's picture

They didn't raise them is the problem and the 'youngins' are severely at a disadvantage once they have to leave the nest because of this.

Morgan's canon in action bitchez.

How do predators hunt in the wild. They try to isolate the young, sickly and old from the herd. What does the herd do to protect them, they circle the wagons around them so the predators can't pick them off. Human ingenuity has figured out how to isolate them even when the wagons are circled and have you willingly give them to the predators at the same time.

Don't blame the computers either they are only tools like fire. It is the actions of the individual using them that is the problem and those actions are taught or in this case lack of teaching/parenting. Fire warms and gives life but at the same time will burn you to death if used wrong.

Disclosure statement I am not a baby boomer or a 'youngin' just someone in the middle of both worlds making an observation.