September 22, 2015
Prime-Age Job Market Still Weak
The job market appears in fine form. August’s unemployment rate, at 5.1 percent, is now at half of its Great Recession levels.
But while the media latch on to the unemployment rate in the federal government’s monthly jobs reports, economists like Gary Burtless of the Brookings Institution are interested in a different number that’s also part of the monthly update: labor force participation among people in their prime working years, ages 25 through 54.
They are the heart of the labor market, and the trend in their participation rate paints a bleaker picture of the job market, Burtless noted in a recent report. In August, the rate was just 80.7 percent – and still below the 83 percent level prior to the 2008-2009 recession.
Labor force participation is the percentage of Americans working or looking for work. It’s critical to how the job market’s faring, because when it declines it means that even people in their prime working years are giving up on finding a job, indicating underlying weakness in the job market.
On a brighter note, the percentage of prime-age workers who have jobs is rising, though this also remains below pre-recession levels.
Burtless concludes, “The labor market is healing, but the sustained drop in participation is an indicator that the job market is still some way from robust good health.”Learn More
August 25, 2015
Workplace Benefit Inequality
Inequality goes beyond the wealth and income disparities that frequently make it into today’s headlines. Employer benefits also flow more freely to people at the top.
The newly released survey of employers by the U.S. Bureau of Labor shows how stark the differences are.
The charts below compare the share of private-sector workers in the lowest income bracket who receive benefits – their earnings are in the bottom 25 percent of all U.S. workers’ earnings – with the share in the top 25 percent. Four benefits are compared: health insurance, the percent of health premiums paid by employers, paid sick leave, and – since it’s August – paid vacations.
For the other charts, click here.Learn More
August 18, 2015
The Future of Retirement Is Now
Gray, small, and distinctly female.
This is what the director of MIT’s AgeLab, Joseph Coughlin, sees when he peers into the future of retirement.
“The context and definition of retirement is changing,” Coughlin said earlier this month at the Retirement Research Consortium meeting, where nearly two dozen researchers also presented their Consortium-funded work on a range of retirement topics. Their research summaries can be found at this link to the Center for Retirement Research, which supports this blog and is a consortium member.
Coughlin spooled out a list of stunning facts to impress on his audience the dramatic impact of rising longevity and graying populations in the developed world, and he urged them to think in fresh ways about retirement. In Japan, for example, adult diapers are outselling baby diapers. China already faces a looming worker shortage, and Germany’s population is in sharp decline. In 2047, there will be more Americans over age 60 than children under 15.
“The country will have the demographics of Florida,” Coughlin said. …Learn More
June 30, 2015
Once-Jobless Boomers Still Struggling
Baby boomers face a Catch-22.
Many boomers will have to stay employed longer than they’d hoped to close the gap between what they’ll need in retirement and what they can realistically afford. Yet the job market is tough for job-hunting older workers, and if they are employed, wages stagnate or decline when people get into their 50s.
A new report by the AARP Public Policy Institute shows the continuing toll on workers ages 45 and older who have suffered a bout of unemployment since the onset of the Great Recession. Lower pay, fewer hours, or more limited benefits in their new jobs and a prolonged inability to find any job are plaguing these workers. AARP found that only half of those hit by job losses have found work, and the rest either remain unemployed or may have given up and dropped out of the labor force entirely.
AARP’s representative survey of some 2,500 older Americans, conducted late last year, aligns with earlier academic studies looking at the Great Recession’s impact on older workers. The youngest boomers are now 50, so the survey includes some people in Generation X.
The following are AARP’s major findings:
June 2, 2015
Teenagers Today Work Less
Teen unemployment has shot up in recent years, and their participation in the U.S. labor force has dropped to historic lows.
These data were highlighted in a series of recent reports by the Federal Reserve Bank of Boston expressing concern that this trend may have long-term consequences for today’s teens, including lower lifetime wages resulting from their early absence from the labor market.
“This is a long-term trend that was going on prior to the Great Recession,” the author of the reports, Alicia Sasser Modestino, a former Federal Reserve researcher now at Northeastern University, said in a recent interview.
Last year, nearly 54 percent of teens in the 16-19 age range who were trying to get their first job – their official entry into the U.S. labor market – were unemployed, according to the U.S. Bureau of Labor Statistics. …Learn More
May 12, 2015
Rewriting the American Dream
Americans once defined success mainly by whether they owned a house or were better off than their parents. Today, it’s a debt-free college education and a comfortable retirement.
U.S. adults feel that their top indicator of financial success is having enough money in the bank to retire (28 percent of adults), followed by sending their kids to college without having to borrow to pay for it (23 percent), according to a telephone survey sponsored by the American Institute of CPAs. Homeownership and upward mobility each came in at a distant 11 percent of the adults, age 18 and up, randomly surveyed by Harris Poll.
“No longer are homeownership and upward financial mobility the hallmarks of financial achievement,” said Ernie Almonte, chairman of the CPA Institute’s Financial Literacy Commission. “Americans have changed the benchmarks for their financial success.” …Learn More
May 7, 2015
The Real Minimum Wage – It’s Dropping
The federal minimum wage is $7.25 per hour, up from $1.60 in 1968. Yet it has eroded in terms of what it can buy.
Its value has fallen, because, despite more than a four-fold increase in the minimum wage over nearly a half century, it has not kept up with inflation.
The 1968 value, when translated into 2014 dollars, was $9.58 per hour, as shown in the chart (left) from the Center on Wage and Employment Dynamics at the University of California, Berkeley. In other words, today’s minimum wage, at $7.25, buys about 25 percent less than it did in 1968.
As the federal minimum wage has eroded, Sylvia Allegretto, the Center’s co-director, noted that numerous states and municipalities stepped in to raise their minimum wage last year. They include Arkansas, Delaware, Hawaii, Massachusetts, Rhode Island, and West Virginia, as well as Louisville, Kentucky, and San Jose, California. Others are kicking the idea around. …Learn More