NYT: US Labor Force Participation in Puzzling Decline

Thursday, 29 Aug 2013 07:59 AM

By John Morgan

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The U.S. labor force participation rate is falling into a precipice, but there is little agreement why, only that the impact masks deeper problems in America, according to The New York Times.

The nation's jobless rate declined slightly to 7.4 percent in July, down from about 10 percent in 2009, Labor Department data show. But The Times said the "entire reason" it has fallen is the drop in the number of people in the labor force, as the share of adult Americans with jobs is unchanged over the past three years.

In fact, the labor force participation rate hit its peak more than 10 years ago, The Times noted.

Editor’s Note:
Seniors Scoop Up Unclaimed $20,500 Checks? (See If You Qualify)

"If the decline stemmed largely from an aging work force, it would be much less worrisome. But the initial wave of baby boomer retirements plays only a small role in the drop; the labor force participation rate has fallen almost as sharply for people aged 25 to 54 as it has for the overall adult population," the newspaper stated.

A report from staffing firm Express Employment Professionals concluded it is unclear what has caused the drop in labor force participation.

Likely factors include slowing educational attainment, weak economic growth and a rise in the number of workers on disability.

"Either way, the decline in labor force participation almost certainly receives too little attention," The Times said.

“Following the Great Recession, we've entered into the Great Shift,” said Bob Funk, CEO of Express Employment Professionals and a former chairman of the Federal Reserve Bank of Kansas City.

“This is a period defined by the Boomer retirement, Millennial frustration and growing reliance on government programs. All indicators suggest this shift is not sustainable, which means we need action on everything from immigration policy to job training.

"We see unemployment ticking down and think things are getting better, but for the last few years, there’s been this unsettling trend that demands more focus. We have to come to terms with what it means for our economy before more damage is done,” Funk added.

However, Grace-Marie Turner, president of the Galen Institute, stated there is not much mystery as to one adverse weight on the U.S. job market.

In an article for Forbes, Turner declared it is a fact — not fiction — that Obamacare is turning America into a part-time nation.

"An avalanche of 'anecdotes' continues to pile up as workers across the country are having their hours cut and their health benefits slashed across a broad range of industries," she wrote.

Labor Department figures show that in 2012, six full-time jobs were created for each part-time job. But so far in 2013, only one full-time job is being created for every four part-time jobs.

A U.S. Chamber of Commerce survey found 71 percent of small businesses said Obamacare makes it harder for them to grow, Turner noted.

"Forcing employers to provide health insurance that soaks up their profits or cuts into operating revenues causes a cascade of distortions," she stated.

"Clearly, the law already is resulting in layoffs, fewer hours and reduced hiring. It may even force some businesses to shut down."

Editor’s Note: Seniors Scoop Up Unclaimed $20,500 Checks? (See If You Qualify)

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