Who are these missing workers?
From author Heidi Shierholz at Economic Policy Institute:
A blog post by Pedro Nicolaci da Costa in the Wall Street Journal highlights findings from a paper from the Federal Reserve Bank of Philadelphia that much of the shrinking of the U.S. workforce has been due to workers retiring early…
…
I’ve looked at the breakdown by age of the 5.6 million “missing workers”—potential workers who, because of weak job opportunities in the aftermath of the Great Recession, are neither employed nor actively seeking work. More than three-quarters of missing workers are under age 55 and are therefore unlikely to be early retirees…
(Chart below the fold)
Compare Fujita’s conclusion from the Fed paper, here http://philadelphiafed.org/research-and-data/publications/research-rap/2013/on-the-causes-of-declines-in-the-labor-force-participation-rate.pdf#page=7, with da Costa’s description in the WSJ. da Costa, “Philly Fed economist Shigeru Fujita argues that the shrinking of the U.S. workforce over the past year and half was “entirely due to retirement” of baby boomers.” http://blogs.wsj.com/economics/2013/12/09/work-force-is-shrinking-because-of-retiring-boomers-philly-fed-paper-argues/
Apparently what Fujita concludes has gotten lost in da Costa’s translation, and both writings are in English. The WSJ staff don’t concern themselves with that. A word, phrase or sentence left out here and there can significantly change the originals author’s meaning and the details presented in the body of the original report are wholly misrepresented. That’s what slanted media can do to the public’s understanding of issues, especially when the data being presented is complex and a bit arcane in a layman’s vernacular.
WSJ blogger failed to note the study concluded that retirement has been significant after 2010. Prior it was recession. Disability has steadied since 2010.
It did concluded that 65% of the decline since 2000 is accounted for from retirement and disability.
It includes discussion on retirees returning to the work force which I think understates the possible return of retirees knowing my cohorts.
Since 2010 I would expect some <55 discouraged workers have returned to the workforce, possibly under employed.
http://www.ritholtz.com/blog/2013/12/on-the-causes-of-declines-in-the-labor-force-participation-rate/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture +%28The+Big+Picture%29