Don’t Blame Baby Boomers for the Shrinking Labor Pool

The declining labor force participation rate has been getting a lot of attention lately, particularly as the national unemployment rate edges downward, even as more people drop out of the workforce.

Why are fewer people who truly want to work actively looking for employment? One theory posits the baby boomer generation is responsible, as its aging members enter retirement. I disagree, for one stunningly simple reason: Boomers are remaining gainfully employed, even after they reach the traditional age of retirement.

Older workers have lower unemployment than the young
Interestingly, workers aged 55 and over -- a good portion of the baby boomer contingent -- have the lowest rate of unemployment of all age groups as of January, at a teensy 4.5%. Conversely, workers aged 16 to 19 years face a jobless rate of 20.7%, and those aged 20 to 24 years suffer a rate of joblessness that borders on 12%.

That's not all. As boomers age, experts expect they will remain in the workforce longer. The latest Occupational Outlook publication from the Bureau of Labor Statistics predicts that workers aged 65 to 74 years will increase their workforce participation by 5.6% through the year 2022, whereas those 75 and older will increase their workplace presence by an astounding 6.4%:

Labor Force Growth Rate, 2012-2022


Source: Bureau of Labor Statistics.

Meanwhile, the age groups declining the most is the youngest contingent of workers, and those considered to be in their prime -- workers aged 45 to 54 years.

Age-related participation rates matter
Recent research from the Center for Retirement Research at Boston College purports that the declining labor participation rate began to speed up as early as 2000, rather than as a consequence of the Great Recession. The author of the study, Alicia H. Munnell, opines that the aging of the working population means that people are moving into higher age categories that have lower worker participation rates, which is lowering the overall rate -- something that will continue until 2020.

This theory has some legs. In 2012, for instance, the labor force participation rates for those aged 16 to 24 was 54.9%, while those aged 25 to 54 logged a much higher rate of 81.4%. In the age group 55 to 64, however, the rate is 64.5% -- lower than the middle group of workers, but still much higher than that of the youngest cohort. Currently, though, the boomer category still tops the current overall rate of 63%.

An aging population will surely influence the worker participation rate to some degree, but the post-financial crisis recession had a much larger effect than the Boston College paper gives it credit for. From 2000 through 2008, for example, the monthly labor force participation rate stayed above 66%, with only 14 exceptions. By January 2009, though, the rate was consistently below 66%, and quickly fell to 64% and below, where it stands now.

A tattered economy, with many fewer job opportunities, seems the best candidate for the principal reason behind the draining of the labor pool. Don't blame the baby boomers -- they're still pulling their weight, often well into their golden years.

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  • Report this Comment On February 23, 2014, at 9:59 AM, plange01 wrote:

    the incredible failure of obama to even IMITATE a real president is to solely to blame for the country nearing a major failure...

  • Report this Comment On February 23, 2014, at 10:25 AM, wsdbiker wrote:

    I am a baby boomer and I do blame my generation. By and large, our generation did not place high enough expectations on our children. My personal philosophy on raising children is that they are adults in training. Too many parents try to extend childhood well into their 20's. Making every kid play in every game, giving awards for achieving nothing, etc has made a generation of il educated adults who don't want to get the required training or do whatever is necessary to get ahead. It is the Baby Boomer generation.

  • Report this Comment On February 23, 2014, at 10:36 AM, rw93003 wrote:

    Under Obama you don't need to work anymore...mooching off the people who do work is the new norm.

  • Report this Comment On February 23, 2014, at 11:38 AM, 2smartforlibs wrote:

    I think you confused about the difference between the work force and the jobs universe. Both number are manipulated by the regime. the work force because when the government gives to you everything the elites think you need why work and the universe has to go down to show a lower than real unemployment rate. If the job no longer exists you can't say it needs filled.

  • Report this Comment On February 23, 2014, at 12:06 PM, dwduke wrote:

    I’m a recovering democrat and am glad I'm conservative now. That move helped me unstress my life. I'm 64, and have a lot of debt because of my former lib ways of thinking I had to get even with the wealthy. No, all I have to do is live frugally and got out of the union shop because of the malcontents constantly harassing the good workers. Now I can work to my hearts content. I have a good trade because kids now days don’t want to get their hands dirty. So there are lots of openings for tool and die makers which are primarily in their 50’s and 60’s. I work in a non union shop now and am happier than when I was in my prime in a union shop. I will work at least until I’m 70. I’m also fortunate, even with my debt, I’m healthy. I don’t smoke, drink, or do drugs. I exercise almost everyday, live frugally, and don’t have to live up to the peer pressure of the malcontent libs. I can work all I want, and be happy without the peer pressure of having to retire. If you are happy working, then do so.

  • Report this Comment On February 23, 2014, at 12:22 PM, loran wrote:

    There is some truth here. For all of you who care about our government and are really interested in learning more, I can recommend the book by Charles Murray titled "Losing Ground". A fascinating effort to show, using the governments own data, how all those social policies which started in the "Great Society" of the 1960's and 1970's, did more damage to our nation than one can believe. It shows how the progressives have made huge mistakes which they covered up with more huge mistakes. It is worth reading to help understand how the people have been lied too and have been misguided.

  • Report this Comment On February 23, 2014, at 12:40 PM, crockett57 wrote:

    I don't buy this BS at all. There are a lot of boomers looking for work. Remember that not all of them were white collar types. A lot of them worked in the construction trades and manufacturing, A lot of them got killed during the crash. Since they became a huge part of the long term unemployed whether it was due to the lack of work or age discrimination. Due to this, the majority of them went through their 401ks to pay bills mostly trying to avert foreclosure and getting their vehicles repossessed. Granted too many of them have given up, some are doing meaningless jobs that pay nothing to keep food on the table and not much else. I've seen this happen all too many times and it is still happening. I know, I contract for a living and I'm currently semi retired. I'm just cherry picking my jobs to keep from dissaving until I'm 62--8 months to go!!!.

    However, I will say this, the 50 somethings who are denied work and health care benefits today because of their age are going to become a Medicare nightmare once they are old enough to qualify for it. The $500 - $5,000.00 health problems they have today will become a $ix to $even digit $ticker $hock we will end up paying for.

    My advice: If you like your current health insurance policy, you "better" keep your health insurance policy because the future prospects for America's health care is looking awfully terminal.

  • Report this Comment On February 23, 2014, at 12:57 PM, Ks121460 wrote:

    Don't blame parents for not wanting their children to be dependent on Obama for everything. I think this is worse than having your children living at home a few more years so that they can grow up. This society has made it extremely difficult to raise well adjusted children. There is too much emphasis on the almighty dollar.

  • Report this Comment On February 23, 2014, at 1:26 PM, F100XLT wrote:

    The study does not seem to account for lag between jobs. With business owners failing to pay living wages, especially young folks are apt to quit, live low with support from babby-boomer's retirement accounts and look for other less crappy low paying employment. The revolving door is turning on these employers that have been taking advantage of this 8 year long recession. Even many of long time employed are now walking out as the top keep giving themselves raises and showing no commitments to hard working professionals. If I were a young professional today, I would not work without a signed contract.

  • Report this Comment On February 23, 2014, at 2:39 PM, corbina2 wrote:

    It's true that the baby boomers are not retiring as one would expect, mostly due to the fact that they were hit so hard during the Great Recession, but what the writer fails to realize is that this too points to why the labor force participation rate continues to fall. The jobs that the younger workforce would have been inheriting as the baby boomers retire are not there, causing more young working age Americans to stay in school longer getting advanced degrees and technical certifications. When the baby boomers do retire, these workers will be in perfect position to take the jobs that are vacant. The labor force participation can be expected to be low for some time given the out-of-balance ratio of baby boomers to younger workers.

  • Report this Comment On February 23, 2014, at 3:33 PM, PhoenixJack wrote:

    When I was a boy in 7th grade in the early 1960's we had shop classes that gave us job training. But those days are gone.

  • Report this Comment On February 23, 2014, at 3:38 PM, fsmoore wrote:

    The trolling here is so patently obvious. Poor grammar and idiotic statements. Seems like the Koch brothers are spending too little of their billions getting dead enders in the labor pool to post these comments. Motley Fool should patrol the comment section. The comments are embarrassing.

  • Report this Comment On February 23, 2014, at 4:21 PM, luckyagain wrote:

    Everyone's personal experience is different but almost all of the comments rely upon it. The simple fact is that our economy has gone through a tremendous change during the last 40 years. The almost total destruction of unions has paralleled a similar destruction of the middle class. The unions set the base for everyone else in our society. Since unions are almost gone, individuals are left to contend with corporation that have overwhelming power over them. The choice is to accept what you are given or quit and look for another job. Since jobs are so scarce, employees just have to accept whatever companies decide. That is life in the USA.

  • Report this Comment On February 23, 2014, at 4:46 PM, Mathman6577 wrote:

    The problem is that many of the people looking for jobs do not have the skills needed to fill the existing positions.

  • Report this Comment On February 24, 2014, at 1:27 AM, ddh1961 wrote:

    Why work if the gubment will pay you to sit home and watch Oprah and vote for them? STFU and go to work, baby boomers. Work ethic went out the window with the 'Gimme Party' now in power.

  • Report this Comment On February 24, 2014, at 8:51 AM, SLTom992 wrote:

    One of the things that is becoming increasingly easy to see is that "college educations" that are not extreme specialties are barely education at all.

    I am a high school dropout that worked my way up the ladder to electronics engineer, embedded systems designer and firmware programmer.

    The SAME kind of position I could do easily is now requiring someone with a Master's degree. This isn't because of any increase in the technology, which in fact hasn't progressed much in the last two decades except for integration level of the individual chips, but because students are increasingly being poorly educated by so-called college instructors.

    I know three other people in almost identical position as I was who are still working into their 70's because their companies cannot find a qualified replacement who is reliable.

  • Report this Comment On February 24, 2014, at 10:42 AM, lcr1946 wrote:

    How much brain power does it take to figure out the number one exit from the job hunt is folks who may or may not be still actively looking for jobs. If they are not filing for benefits, they aren't unemployed by the way the numbers are totaled. Unemployment in NC is going down because folks have been booted off unemployment and are not counted.

    People are either working at jobs they can productively fill or they're wasted. I disagree with the really stupid idea that just finding a job is what counts. How stupid and what kind of waste is it to stick somebody with 30-40 years experience in a field and has been an executive for the past 20 years in a cook or counter job at Taco Bell.

    We have a bunch of folks that are penny-wise, but severely warped at being pound foolish. So what's the benefit of having a 55 year old who has done nothing in the past 30 years that has required the hand-eye co-ordination and mental perception of simply acting, not reacting to 10 trays of food and drinks lined up on the counter to be delivered properly. The 18 year old kid who's been working their for a year is going to be much better at getting the food to the right folks than the 55 year old.

    The worry is so great that some guy who has worked all his life and is now out of work with zip prospects other than the Taco Bell job. Given his much higher earnings and taxes and so forth he has contributed to the economy, why the hell shouldn't he be collecting and looking for an appropriate job.

    Just because the snot-draggers are so worried and wringing their hands over somebody's unemployment situation like they are personally having to support that person. First, not everybody's first concern in life is about somebody else. Many of us are much more concerned about our business than about other folks business.I have no problem with making legitimate complaints and suggesting improvements to the system that make it more efficient or easier to identify those taking advantage of the system, but I have a real problem with weenies who persist in thinking they are supporting the country and anybody receiving government benefits is lazy and good for nothing.

    Get over your cheap selves! take care of your business and leave the rest of us to take care of ours. Your whining about taxes really falls on deaf ears because many of us, now retired and not by choice, have taken care of our selves, the kind of self-reliance conservatives talk about all the time, over the past several decades. Many of us have earned better incomes than you whining weenies and paid more taxes at higher tax rates than 95% of whiners.

    I don't really care what your assessment of the baby boomers is,we paid our way for our selves and assisted our parents. We had our snot-draggers but we didn't try to screw everybody and whine about everybody else.

    For people to go to work, they need to get hired to jobs. despite being a fairly senior person with a wide range of contacts and an excellent reputation, I couldn't buy an interview for over four years and finally threw in the towel and retired. The stupidity of cutting off responsible workers because they didn't take the counter job at the local drug store when their last position was VP of the company that supplied the store is pretty obvious.

    These are people who have been at the upper end of their profession and should have been re-employed, but C'est la vie, they weren't. The question becomes, do you know enough to understand what will happen if conservatives are allowed to cut all these programs. There won't be any big boon to employment, rather it will only get much worse.

    The bull you're been told and unfortunately believe about economics is wrong. Halting all those payments would simply make large reductions to the budget that would do nothing for the economy, because the only way that would improve is if there were large accompanying tax reductions to put more spending money in people's pockets. Even tax cuts won't help the misery that would occur as thousands are suddenly out on the streets without income. Do you understand that whole families standing on a street corner with signs begging for money or under an overpass looking for enough cover to do them all for thew night. The reduction in spending will not convert in to a windfall of investment.

    If you do not actually increase business, owners are not going to hire. When thousands are suddenly without any kind of money, businesses will be severely negatively affected and will begin to close upping the count of unemployed. People are not going to stand for that kind of unemployment and poverty, so government money will be appropriated for the poverty stricken and we're back at it. The best deal is to encourage employment and at least maintain government spending.

    Businesses do not make their hiring decisions on the expected tax rate or benefits requirements or any of the other things people claim aids or hampers employment. The only thing the business owner ends up making his decision to hire or not on is can he make more profit by hiring additional help or does he have to hire because of some mandate. If there is enough business to allow the hiring of another person and will increase profit, then businesses will hire. All that theoretical stuff about "at the margin", blah, blah is wonderful theory for building on, but we have to understand, it's the ability or opportunity to increase profits.

    So, the opportunity for employment is dependent on the volume of business. The volume of business depends on the number of businesses or consumers that have the funds and are desirous of purchasing a business' goods or services. The speed of growth of a business and the resulting employment are often dependent on the volume of customers making purchases.

    When quick boosts to employment are desired, the only entity with the purchasing power to rapidly boost employment is the federal government. No one else has that level of purchasing power. So we're back to the government either spends to support the unemployed or makes large purchases to support employment to assist the return of a growing economy. While consumer purchasing is a powerful engine, it is not going to respond positively to a fading economy with growing unemployment.

    Let's get the economics right before condemning the suffering to complete expulsion from society.

  • Report this Comment On February 24, 2014, at 2:03 PM, jmd868s wrote:

    I think that it is also fair to say that when you have people hanging onto jobs that should be entry level jobs, the median age of jobholders will go up. I am in my early thirties and I had to get laid off 3 times just to find a job that gave me long term employment. I am a college graduate who spent months after graduation working in an electronic connector plant running a punch press because I had a mortgage to pay. It isn't fair to blame baby boomers but it is also not fair for boomers to label my generation as lazy and the cause of our employment problem (like most comments here suggest.) I am pretty sure there was a large section of the boomer population (hippies) that would fit right into the mold of the slackers of my generation. The real problem is thinking we are different and not two sides of the same coin. When half the jobs held by Americans in the 70's are now performed on foreign soil it is kinda hard not to have a lower participation rate.

  • Report this Comment On February 24, 2014, at 5:33 PM, clutch58 wrote:

    The only paid posters are liberals like fsmoore-amazing how much loyalty an EBT card and a Section8 housing voucher will buy.

  • Report this Comment On February 24, 2014, at 6:32 PM, JePonce wrote:

    We abort a million a year...what else needs to be said?

  • Report this Comment On February 24, 2014, at 8:39 PM, peterwolf wrote:

    I don't blame the 'baby boomers' for the declining labor participation rate. I blame our virulent anti-business White House and Senate. Want proof? Which state in the union LEAST resembles this White House and Senate? The booming state of Texas. Which ones MOST resemble this White House and Senate? The stagnant states of New York, Illinois and California.

    Case closed.

  • Report this Comment On February 25, 2014, at 12:13 AM, markvanauken wrote:

    Offer a living wage and KEEP YOUR PROMISES, and you won't lack for good workers.

    Don't, like the majority of "employers", however, and you will find good help extremely hard to find.

    That's just the way it works.

    You may think that you have the "upper hand", but, at the end of the day, they will always make it even..

  • Report this Comment On February 26, 2014, at 10:51 AM, Mathman6577 wrote:

    @peterwolf:

    Add Conn. to the list of your list of declining states: More people moving out than moving in. Higher taxes and more government spending. A left-wing governor who is an Obama wantabe and who drives out productive businesses with his (and the compliant Dems in the Statehouse) anti-business policies and corporate cronyism (he gives out money to businesses like Mexican resturants and taco stands that have little chance of success.)

    Add N.Dakota to your lost of booming states with low unemployment and an influx of people that want good jobs and a product that is in demand.

  • Report this Comment On February 26, 2014, at 10:58 AM, Mathman6577 wrote:

    @fsmoore:

    It works both ways. The George Soros-funded left-wing groups are in full force spreading their nonsense. And BTW unions have far outspent the "evil" Koch brothers in providing money to the SuperPacs.

    And one last thing. There is a thing called the U.S. Constitution (which you left-wingers probably have never read) that allows for free speech as long as it doesn't lead to a safety issue (like yelling fire in a movie theatre). So please stop trying to tell people what to do !!!!

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