Slamming The Door Shut On The "Plunging Labor Force Participation Rate" Debate Once And For All
And to think we have none other than the US Commerce Department to thank for issuing the one report which not only refutes all wrong "explanations" of the collapsing labor force participation rate, propagated by the Bureau of Labor Statistics and the Fed itself. that blame said plunge on demographics, but once and for all slams the door shut on any future debate about just the New Normal secular shifts within the aging US population truly are.
From: "65+ in the United States: 2010"
On the one hand, the recession forced some workers to retire sooner than planned. On the other hand, the declines in housing and financial asset prices pushed many workers to delay retirement. The decision of when to retire was being influenced by opposing factors: (1) the decline in stock market prices and lowered housing values supported retirement delays, and (2) the rise in unemployment and greater difficulty among older adults in finding another job supported earlier retirement (Hurd and Rohwedder, 2010b). Among those nearing retirement age (age 50 to 61), 63 percent reported pushing back their expected retirement date as a result of economic conditions (Taylor et al., 2009a).
In 2010, 16.2 percent of the population aged 65 and over were employed, up from 14.5 percent in 2005. In contrast, 60.3 percent of the 20 to 24 age group were employed in 2010, down from 68.0 percent in 2005. Employment shares declined from 2005 to 2010 for all age groups younger than age 55. There was no statistical change in the employment share for workers aged 55 to 64 nor those aged 70 to 74. Engemann and Wall (2010) found that more people aged 55 and over were employed during the recession than would have been if there was no recession. Using the Bureau of Labor Statistics employment data, Engemann and Wall found that during the 2007–2009 period, employment grew by 7.4 percent for the population aged 55 and over. Based on trends prior to the recession, employment for this age group was expected to grow by only 6.1 percent. All younger age groups experienced a decline in employment during the same 2007 to 2009 period.
Oh, we almost forgot the punchline: dear US "retirees" - if you want to mitigate the impact of the US depression and the loss of savings income courtesy of the Fed's ZIRP policy, all you have to do is, well, work until you die.
Many older workers managed to stay employed during the recession; in fact, the population in age groups 65 and over were the only ones not to see a decline in the employment share from 2005 to 2010 (Figure 3-25)... Remaining employed and delaying retirement was one way of lessening the impact of the stock market decline and subsequent loss in retirement savings.
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