One of the disappointing aspects from last week’s jobs report was the decline in labor force participation. These are people leaving the workforce (in these terms, leaving and no longer looking for work), which at the trough of the recession included people of all ages. Digging through the numbers, though, are we really seeing fresh skepticism from job seekers? More importantly, is it time to freak out? Perhaps not…
“This is a story about Boomers retiring prematurely,” or so says The Atlantic’s Matthew Brian:
It’s too late for them to learn new skills — and even if they could, firms would prefer to invest in younger workers. Maybe their spouse still has a job. Maybe the recently buoyant markets have restored their nest eggs to a decent size. Whatever their thinking, they aren’t working. And they won’t want to anymore. The Great Recession has simply accelerated what was always going to happen.
Brad Plummer, who also lists other possible factors, contextualizes the role of Boomers in a new Barclays survey about labor participation since 2007:
About 35 percent of the people who have dropped out of the labor force since the recession began in 2007 do want a job, but they’ve become too discouraged to fire off resumes. That’s not good. The other 65 percent are people who have left the labor force and don’t want a job. Some of them are young and perhaps decided to go back to school. But the biggest chunk, by far, seems to be composed of Baby Boomers who have decided to retire early.
They both include this handy-dandy graph to illustrate the recession’s bad timing for Boomer retirement: