Boomers Turn On, Tune In, Drop Out of U.S. Labor Force

[Purveyor]

When Robin McLane’s generation hit public schools in the 1950s, there were never enough classrooms or teachers to accommodate the bulge, she said. So she’s not surprised about the latest shock that boomers are delivering to the U.S. economy.

“People all around me, relatives and friends, are either retiring, or they’re finding it’s very difficult to find work anywhere from 55 on,” said the 65-year-old, who lives in Portsmouth, New Hampshire, and retired from her job as a high school literacy specialist in June. “For me, I was ready to move on.”

The share of Americans in the labor force, known as the participation rate, is hovering around an almost four-decade low as the population ages and discouraged job seekers give up looking for work. Federal Reserve research shows retirees are at the forefront of the recent exodus, which blunts the impact of policy aimed at boosting the economy and workforce.

In the two years ended 2013, 80 percent of the decrease in labor force participation was due to retirement, according to calculations by Shigeru Fujita, a senior economist at the Federal Reserve Bank of Philadelphia. And while the number of discouraged workers rose sharply during and after the recession, the group’s ranks have been roughly unchanged since 2011.

That tilts the debate on whether the participation rate can fully rebound alongside the improving economy, as retired workers are unlikely to re-enter the workforce, said Michelle Girard, chief U.S. economist at RBS Securities Inc., in Stamford, Connecticut. A tighter supply of workers means wage pressures would build faster than otherwise, something Fed Chairman Janet Yellen may watch as a leading indicator of inflation, Girard said.

more...

http://www.bloomberg.com/news/2014-02-10/boomers-turn-on-tune-in-drop-out-of-u-s-labor-force.html

[KansDem]

1. One phenomenon that I don't think we're prepared for...

Boomers started retiring a couple of years ago, if one considers the years 1946-64 as the era of "boomer babies." So those of us born in 1946 will have turned 65 in 2011.

Many of us boomers bought houses and will now sell them to harvest another "nest egg"--the equity--for retirement. Only, what happens if no one can buy them? For years now, we've read about crushing student loan debt and no jobs for graduates. We've witnessed wage/salary stagnation, many more job seekers with much fewer job openings, and the increasingly difficult task of simply raising a family.

So what happens to those of us who now want to sell our homes and move into retirement communities?

My parents as well as my aunts and uncles, all "downsized" to less-expensive living accommodations using their nesteggs from selling their homes and collecting the equity to live on along with Social Security and any retirement plans.

But what happens when we have a glut of homes on the market and no one to buy them?


[font size="1"]On edit: Changed "phenomena" (plural) to "phenomenon" (singular)[font size="2"]

[flamingdem]

2. Younger people seem to want urban, walkable neighborhoods

that don't require cars. That might add to a glut of homes in suburbs if they are far from city hubs.

[Hekate]

3. Jesus.We're of retirement age now, not in kindergarten.Our younger sibs can't find work after layoff

... because they're "too old."

The "Turn On, Tune In, Drop Out" meme was coined to apply to a bunch of 18 - 24 year olds a long time ago, and really should be retired itself. What the hell does it have to do with people who are now nearing 70 years of age?!

Christ on a Trailer Hitch, that kind of lazy-journalism headline pisses me off no end.

[GoCubsGo]

6. Thank you!

I'm one of those "younger sibs". I didn't drop out, I was pushed out. I would like to get back in, but I'm one of those "too old" and out too long types.

[DemocraticWing]

4. People talk about the labor force participation rate like it's a crisis.

The same people spent the last decade telling us the labor force participation rate was going to drop when Boomers retired, and so a bunch of jobs would come open for everybody else.

The difference is that once Obama took office, what was a simple fact of the current job market became a "crisis" according to the all-knowing conservative media.

[Blue_In_AK]

5. They really couldn't pay me enough to re-enter the workforce.

45 years was quite enough.