The drop in the labor force participation rate
March 6, 2011 Leave a comment
I noticed something interesting in this chart from CalculatedRiskBlog.com that I posted a few days ago. (This is not specific to Spokane.)
Look at the vertical ovals I have added to the chart. For all post 1970 recessions, the labor force participation rate kept increasing. But look at what happened right around 2001- the labor force participation rate fell and has continued falling. This is a major and significant change in direction.
With fewer people participating in the work force, are we less productive as a nation? Has automation replaced so many workers that we can achieve the same productivity with fewer workers? Wouldn’t we be even more productive, as a nation, if we could put these displaced workers back into productive activity?
CalculatedRisk suggests the drop is due to demographic changes. The leading edge of the “baby boom” has already begun retiring.
- “Labor Force Participation Rate Remains At 25 Year Low 64.2%, Birth/Death Adjustment: +112,000” and related posts (zerohedge.com)
- Chart of the Day: the Collapsing Labor Force Participation Rate (pragcap.com)
- Jobless Rate Falls Further (online.wsj.com)
- Unemployment data update (U.S.) (inlandnw.wordpress.com)
- Jobless Rate Drop: It’s for Real – Mostly (blogs.wsj.com)
- The Jobs We’ve Lost (andrewsullivan.theatlantic.com)
- Participation Rate Update (calculatedriskblog.com)
- “Unemployment Calculations (Updated)” and related posts (qando.net)
- “Labor Force Participation Rate Drops To Fresh 25 Year Low, Adjusted Unemployment Rate At 11.7%” and related posts (zerohedge.com)