Posts Tagged "unemployment"
August 22, 2017
The U.S. Labor Participation Problem
The superlatives come fast and furious in the spate of reports coming out on the dwindling participation in the labor force by Americans still in their prime working years.
- The fall in men’s participation in the United States has been going on for decades but has been steeper here than in all but two advanced economies (Israel and Italy) in recent years. “We have won the race to the bottom,” says Nicholas Eberstadt, an American Enterprise Institute scholar and author of “Men Without Work: America’s Invisible Crisis.”
- A more recent drop in labor force participation for American women is “unique” – in the rest of the developed world, women’s participation continues to rise, according to a Brookings Institution report.
- Men with no more than a high school degree make up 40 percent of workers but 60 percent of those who have dropped out of the U.S. labor force.
- The decline in participation has been steepest among men without a high school education, particularly black men.
Economists count not only working people as being in the labor force but also people who are trying to find a job. Something is amiss when millions of Americans in their prime – between ages 25 and 54 – are doing neither, especially in a strong economy like the United States is experiencing now.
This issue is not new, but the election has brought it front and center. Also, the prolonged decline in men’s labor force participation had been partly masked by increasing women’s participation, which pulled up the aggregate figures. Now that women have begun withdrawing, the trend has become increasingly obvious – and ominous.
The Brookings and AEI scholars offer myriad, often overlapping, explanations for why this is happening: …Learn More
November 6, 2012
Dicey Retirement: The Long Ride Down
No one really needs confirmation of how tough the Great Recession was. But the Center for Retirement Research at Boston College has quantified the decline – and it’s brutal.
Investment losses and falling home prices placed 53 percent of U.S. households in danger of a decline in their standard of living after they quit working and retire, reports the Center, which funds this blog. That’s up sharply from 45 percent in 2004, prior to the financial boom, which created a strong – albeit fleeting – increase in Americans’ wealth.
The longer-term erosion in Americans’ retirement prospects is even more troubling and reflects deeper issues. The Great Recession just hammered the point home.
In 1989, just under one-third of Americans faced such dicey retirement prospects. The steady erosion since then coincides with the near-extinction of traditional employer pensions that guaranteed retirees a fixed level of income. It turns out that the DIY system that replaced them, a system reliant on Americans’ ability to save in their 401(k)s, is not working.
Older baby boomer households with 401(k)s have just $120,000 saved for retirement, according to the Center. That’s not even enough to pay estimated medical costs not covered by Medicare. Retirement savings for all older boomer households is a paltry $42,000 – that means a lot of people have no savings…Learn More
June 14, 2012
Progress Stalls for Young Adults
The promise of America is progress, but that progress stalled for the youngest generation: U.S. workers under age 45 earned dramatically less than workers who were that same age a decade ago, the Federal Reserve Board’s latest survey shows.
For Americans 35 through 44, the median household income – the income that falls in the middle of all earners – was $53,900 in 2010. That’s 14 percent less income than in 2001 when households in the 35-44 age bracket were earning $63,000, according to the Fed’s Survey of Consumer Finances released Monday. For young adults in the under-35 age bracket, median income fell to $35,100 in 2010, from $40,900 for that group in 2001.
The median income also declined, by nearly 9 percent, for Americans in their peak earning years, 45 through 54, to $61,000 in 2010 from $66,800 in 2001. [Incomes for all years are in current dollars.]
The sharp decline in real incomes, especially for young adults, occurred in a decade bracketed by the high-tech bubble of early 2000 and the jobless recovery of 2010 from the financial crisis. Without further analysis, it’s difficult to pinpoint precise explanations for the patterns. But the reasons vary depending on the age bracket being analyzed.
May 29, 2012
Boomers May Stop Work Because They Can
The wealth of non-working Americans between ages 55 and 61 increased from $83,000 in 1992 to $98,000 in 2008, according to new research from the Urban Institute in Washington. (Comparisons are in constant dollars.)
Potential explanations for this trend range from greater U.S. inequality that launched more boomers into the top wealth tier to a rise in the numbers of married men who don’t work – but have wives who do.
Barbara Butrica, a senior research associate at the Urban Institute, said her study did not look into the “why” for the emerging group of voluntary non-workers who are approaching traditional retirement ages, married and single men in particular. One possibility, she said, is that “they are leaving the labor force because they can afford to.” …Learn More
May 22, 2012
New Financial Tools Backed by Research
The Center for Retirement Research at Boston College has created a prototype personal finance website with tools and information on topics ranging from how to reduce spending or refinance a mortgage to the best way to draw down savings during retirement.
The website offers a comprehensive set of tools backed by impartial academic research – not sales pitches. Individuals can use each calculator, “Learn More” lesson, or “How To” guide individually or as the building blocks for an overall financial plan, which they can construct in a step-by-step process that begins on the homepage.
The website, also called Squared Away, was created by the Financial Security Project (FSP), a financial education initiative of the Center. It was funded (also like this blog) by the Social Security Administration.
The Center plans to distribute the site through various organizations, such as credit counselors, financial planners, employers, credit unions, and non-profits involved in helping low-income people build up their savings.
The website is still in the “beta” phase and will be improved over the coming months. We invite readers to try out the tools and comment on them by clicking “Learn More” below. All comments – good and bad – are welcome.Learn More
May 8, 2012
Graduating in Era of Low Opportunity
Philip Seymour Hoffman playing the washed-up salesman, Willy Loman, in “Death of a Salesman,” is all the rage on Broadway. But when I saw the play recently, it was Biff who got me thinking about young adults today.
In the Arthur Miller classic, Willy anguishes over son Biff’s failure to hold down a job in the city. But the irony is that Biff, played by Andrew Garfield, probably did very well for himself after leaving Brooklyn for Texas. I imagine he became an oil baron or wound up owning substantial real estate in downtown Houston.
Young people graduating from high school or college today don’t have the virtually unlimited opportunity that existed in the 1940s when Miller wrote the play: the personal drive to find a job and establish a career is not enough anymore. Young graduates who sign up for unpaid internships and double up on college degrees are well aware of this.
Last year, 54 percent of adults ages 18 to 24 were employed – that was the lowest level since the government started tracking the data, in 1948 – according to a February report by the Pew Research Center. Despite an improving job market, it was only 55 percent in March. Job creation – 115,000 were added in April – is below the pace that will open up meaningful opportunity for young people. …Learn More
April 17, 2012
Fewer Claiming Social Security Right at 62
New research shows that the share of Americans who sign up to receive their Social Security pensions at age 62 has declined sharply over the past decade.
This trend is expected to continue despite a temporary spike in applications by 62-year-olds during the Great Recession, said Richard Johnson, a senior fellow who conducted this research at the Urban Institute, a Washington think tank. This is a major shift in retirement behavior, and it reflects sweeping cultural changes that range from more flexible employment options for older workers to the baby boomer health and fitness craze.
“Over the past 10 years, we saw the share of people claiming at 62 fall about 10 percent for men and 8 percent for women,” he said. “That’s a pretty big decline in 10 years’ time.”
Sixty-two year olds still constitute the largest single group of new applicants every year, regardless of age. That’s why the significant decline in their application rate is notable. Those who sign up for their Social Security checks when they first become eligible – within days or weeks of their 62nd birthday – are known as “early claimers.” People with physically demanding jobs are more likely to do so, because of health problems or unpleasant and exhausting work. …Learn More