

Unemployment Rate Down Due To Participation Rate Decline - billswift
http://www.istockanalyst.com/finance/story/6030847/unemployment-rate-down-due-to-participation-rate-decline

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lkrubner
Just a reminder to everyone: the decline of male participation in the economy
is a long term trend that started at least in the 1950s:

<http://www.bls.gov/opub/ted/2007/jan/wk2/art03.htm>

As the Bureau Of Labor puts it:

"The labor force participation rate of men has been decreasing since the
1950s, having registered 86.4 percent in 1950, 79.7 percent in 1970, 76.4
percent in 1990, and 73.3 percent in 2005. This decline has resulted from
various factors. For example, the Social Security Act was amended in 1960 to
make individuals under 50 years of age eligible for disability payments."

I have never heard a comprehensive reason for the 60 year decline. It is
possible that there is no one reason for the 60 years of decline. Each decade
there are obvious reasons for the decline during that decade. For instance,
the mechanization of agriculture during the 1950s and 1960s caused many jobs
to be lost, especially among African Americans, and many of the people who
lost their jobs were never able to find new ones (it can be tough to find a
new career if you are 40 years old and have little education).

The loss of the textile industry added more to the decline.

I have not heard a theory about the long-term nature of the decline. Possibly
the demographic shift after 1964 (the end of BabyBoom in the English speaking
countries) add up to one generation losing their jobs mid-life and the next
generation simply being smaller than the previous one? I am not sure. I've
never seen that argument made.

Of course, for context, all of this is set off against the dramatic rise in
the participation of women in the economy, a trend that peaked for most female
demographics in 2000.

Since 2000 there has been a general decline in nearly all demographics.

The USA used to be unusual (for most of the century before 2000) in that it
put a very high percentage of its adults to work (relative to Europe).
However, since 2000, Europeans nations have seen an uptick in labor
participation and the USA has seen a downtick, so the USA rate of
participation in the economy is now closer to the norm for developed
countries.

Here are the World Bank numbers for men and women in all countries:

<http://data.worldbank.org/indicator/SL.TLF.CACT.MA.ZS>

<http://data.worldbank.org/indicator/SL.TLF.CACT.FE.ZS>

(These numbers are interesting but I am curious if the same definition of
"work" is used in all countries. In the female rankings, the USA is at 58%
whereas Uganda is at 76%. I do not believe there are any nations on Earth
where 76% of the females engage in the monetary economy. I'm guessing then
that some non-monetary work is being counted in Uganda, but not in the USA.)

~~~
nandemo
The technical term for the baby boom thing is _demographic window_.

<http://en.wikipedia.org/wiki/Demographic_window>

E.g., Brazil is in the demographic window now, and labour participation has
recently peaked. Most Western European countries are past that window, as is
the US. If they have an uptick in labour participation, I'd guess it's due to
immigration.

Another factor is simply the country's economic development stage. In poor
countries, lots of people are working on subsistence or otherwise low-tech
agriculture so they cannot retire early.

Not clear why you think 76% for female labour participation is infeasible.
They have to work.

Some speculation: as for men's rate decline, I'd guess it's mostly due to
women's rate being on the rise (in the long run)? Men have to work less if
their wives are working. And in the US, you'd probably want to look at the
incarceration rates too.

~~~
lkrubner
"Not clear why you think 76% for female labour participation is infeasible.
They have to work."

How is this coherent? If they have to work then why isn't the rate 100%? If
you agree that 24% are not working, then you admit that there might be forces
at work that could keep 20% or 30% or 40% or 50% from not working. The
sentence "They have to work" could only be justified if the participation rate
was 100%

~~~
nandemo
> The sentence "They have to work" could only be justified if the
> participation rate was 100%

Seriously? It could mean "many of those 76% have to work so that they won't
starve" since, as I said, a lot of them are working on subsistence
agriculture. As opposed to a lot of those 58% of women in US, who could stop
working and still not starve (for instance, see Japan's figures).

~~~
lkrubner
Why is it 76% and not 77%? And why not 75%? What about 79%? Do you have the
slightest bit of evidence that exactly 76% of the women need to work, but not
77% or 78% of the women? You can not justify the statement "They have to work"
unless 100% of them are working. (Or you could take the alternate route and
simply define working as necessary, which is how some economists will
occasionally treat the phrase "at the margin". But at that point, you are not
saying much, other than "76% of the women need to work because that is how I
have defined the word 'need' in my model.")

~~~
nandemo
Look, I don't have to "justify" anything. My initial comment was intended to
add to yours, not to argue about a minor point or quibble about the meaning of
simple natural language sentences such as "they have to work". I didn't assert
or tried to prove that 76% is correct, I wondered why you thought 76% is
implausible, as it seems totally plausible to me, that's all.

> Do you have the slightest bit of evidence that exactly 76% of the women need
> to work,

I never said that.

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joshsegall
Although, unexpectedly this is not due to a growth in the number of
discouraged workers. It's not clear where they went. See
[http://www.motherjones.com/kevin-drum/2012/09/why-did-
labor-...](http://www.motherjones.com/kevin-drum/2012/09/why-did-labor-force-
shrink-so-much-august)

~~~
billswift
If you count the long-term unemployed, the number of discouraged workers has
grown. U6, which only counts those who are discouraged and have been
unemployed less than a year, hasn't risen, but other unofficial counts that
include those unemployed for more than a year has.

In fact, by some unofficial counts, like this one
[http://www.opednews.com/articles/Real-Unemployment-at-23--
by...](http://www.opednews.com/articles/Real-Unemployment-at-23--by-Michael-
Collins-120909-358.html) , total unemployment may be as high as 23% right now.
Nor is this the only one, this sight is pretty lefty, two recent essays on the
conservative site VDare.com have given similar estimates (22%) for current
total unemployment.

~~~
GFKjunior
I think that number is very reasonable. Zerohedge.com is very libertarian and
they also use the 23% number provided by shadowstats.

------
runawaybottle
"Discouraged workers"

<http://www.youtube.com/watch?v=_ogxZxu6cjM>

------
FD3SA
Some further reading for the curious [1][2]. It is becoming increasingly
apparent that the structural unemployment issue is indeed due to rapidly
advancing automation technologies.

Note that the current 58% labour force participation rate is startlingly low
when compared to the past two decades.

1\. [http://econfuture.wordpress.com/2012/08/20/china-
robotsautom...](http://econfuture.wordpress.com/2012/08/20/china-
robotsautomation-and-unemployment/)

2\. [http://raceagainstthemachine.com/2012/01/05/the-rebound-
that...](http://raceagainstthemachine.com/2012/01/05/the-rebound-that-stayed-
flat/)

