Charts on employment

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Submitted by moneymaker on August 5, 2017 - 12:04pm

Do these 2 charts jibe?

Not really sure how the unemployment rate can be going down when at the same time the labor participation rate is also going down.

Submitted by SK in CV on August 5, 2017 - 12:17pm.

More people of non-working age in the population. More (under 18, (or under 22 if they're in college) and not actively looking for a job, more full retirement age retirees, more early retirement retirees) as a percentage of the entire population. Much of the decline in the participation rate over the last decade has been a result of shifting demographics as opposed to a structural change to employment rates. The participation rate peaked around 1990 as all baby boomers entered the work force and the stay-at-home-moms all but disappeared. It was flat for a decade until 2000, when the oldest baby boomers started to retire early. We're about 10 years away from the youngest baby boomers hitting retirement age. The current trend (since 2000) is (and was) predictable based on demographics, irrespective of changes in the economy.

Submitted by moneymaker on August 5, 2017 - 4:00pm.

Good explanation SK in CV, and I thought maybe there were just more hippies around than I thought.

Submitted by no_such_reality on August 7, 2017 - 7:36am.

moneymaker wrote:
Good explanation SK in CV, and I thought maybe there were just more hippies around than I thought.

SK is incorrect. The labor participation is measured by those working divided by those over 16 and looking for work or working.

If you are 15 you do not factor, if you are 40 and not looking for work (actively) you do not count, if you are retired, you do not count. If you are in school and not working, you do not count.

The LP can fall when people stop looking for work. A falling LP actually pushes the UR down as the looking for work numbers fall. Conversely, a strong economy can have increasing unemployment rate as the LP rises as more people return to work.

Also keep in mind whether or not your look for work also doesn't count for the unemployment rate if you've been unemployed more than 52 weeks. That was the 1994 change.

Submitted by no_such_reality on August 7, 2017 - 7:56am.

LOL, good catch, I wrote it wrong.

I gave the formula for the employment rate.

The kick is still the definition of unemployed. The official labor force is employed plus unemployed. My outline of not counting as unemployed stands. Unemployed does not count over 52 weeks or not looking.

and I really need to quit posting before coffee. So yes, SK was right.

Submitted by moneymaker on August 7, 2017 - 8:30pm.

Some of the poorest countries have high labor participation rates so by itself it is not significant, however I think not counting people because they aren't employed or actively seeking work (quit looking) is kinda BS. Now is the drug dealer on the corner employed (he's not paying taxes) depends on one's point of view I suppose. Are under employed people considered employed, probably. I would like to be unemployed but I can't afford to be!

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