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Can we also go back farther than 1975? You know, like back to the 20's or even 50's. The participation rate was at a historic high in the 70's due to the recent injection of women into the workforce en mass. If you look back further you will see that we are merely regressing to the mean.
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So numbers are down, but not record low.
Nice to see that big drop start in 2009... the year I completed graduate school.
I still have fond memories of the job market conditions...
Can we also go back farther than 1975? You know, like back to the 20's or even 50's. The participation rate was at a historic high in the 70's due to the recent injection of women into the workforce en mass. If you look back further you will see that we are merely regressing to the mean.
EDIT: Joe beat me to it.
A lot of the older data is hard to come by and not overly accurate. I was doing some research for a paper 8/9 years ago and getting good economic data that is usable was a bit of a pain.
Also, why would we want to compare the rates to a time when women traditionally didn't work?
We aren't regressing to the mean if the earlier samples didn't include nearly half the population.
Also, why would we want to compare the rates to a time when women traditionally didn't work?
We aren't regressing to the mean if the earlier samples didn't include nearly half the population.
Well the idea is that there was no economic reason women were not working. It was merely a societal pressure that was relieved and allowed women to go to work. Just because women are allowed to work doesn't mean that there are now magically new jobs for them to fill just because they are there. So you would expect, absent some inherent shortage of workers in the prior system, that any short term surge in participation would regress to the mean. The new workforce would just look more diverse.
it looks like there were tons of jobs for them to fill considering the surge of people employed in the workforce just after 1976.
You knew exactly what I meant. There was obviously a surge in participation but you would need a lot more data on the type of jobs and the competitive forces on income and such. A lot of jobs can be created that are not sustainable long term. Or a lot of jobs were created but with a large increase in available workers both through women entering the workforce and globalization, competitive forces put downward pressure on wages which then alters the cost benefit analysis for working vs not working. There are way too many factors to consider and I am not an expert by any means. But looking at a much longer time horizon gives us a clearer picture of long term trends. This shows that we are not at an all time low. We are merely within a normal range of workforce participation.
More and more women had to go to work because of the rising tax rates. And the desire for more consumer goods, and larger more expensive houses, and the rising cost of healthcare for no good reason other than Insurance and ridiculous malpractice awards are out of hand.
Haven't baby boomers been a significant and increasing number of retired people for the entire time that the original participation graph was going up?
I would suspect that is a trend that is behind the reduction in "reported unemployment" just as much as anything - as the boomers are retiring, they are not consuming fewer goods, but they are vacating jobs which still need to get done.
I made a few charts of my own, based on data from CMS.gov
Here's total healthcare spending in the US as a % of GDP:
Interesting how it just keeps going up at a roughly linear pace. Fortunately, we still have several decades left before healthcare spending consumes 100% of GDP.
Here's the overhead / administrative cost associated with health insurance:
Aaaaand, overhead / admin costs as a percentage of total healthcare spending:
More and more women had to go to work because of the rising tax rates. And the desire for more consumer goods, and larger more expensive houses, and the rising cost of healthcare for no good reason other than Insurance and ridiculous malpractice awards are out of hand.
Remember when most mothers did not work, and most dads cut their own lawn on the weekends? Labor participation prior to 1970 reflects culture more than the economy, although the economy (or culture, or a mix) changed that going forward.
Workforce participation reflects individuals of working age, and those within that age that have stopped looking for work. It's at historic highs. Not since the "malaise" of Carter have we been this high. Luckily (/sarc) the government safety net has never been larger.
Workforce participation reflects individuals of working age, and those within that age that have stopped looking for work. It's at historic highs.
Serious question:
When deriving a correction factor for the unemployment rate relative to the workforce-participation rate, how does one differentiate between those who have "stopped looking for work" and those who elect not to work.
Eg: assume a recently married heterosexual couple. Prior to marriage both members of the couple had jobs; one a highly paid career-type position, and the other an hourly-type mid level position.
Shortly after becoming married, the female becomes pregnant. A few months prior to her giving birth, the male (who had the hourly-rate job), loses his job.
The woman gives birth, and the couple decide that she will return to her highly-paid job, while the man becomes a stay-at-home dad.
So, how do you count this? Is the man "unemployed?" Did he voluntarily leave the workforce? One could argue that had he not lost his job prior to the birth, that the couple would instead have elected to use childcare services, with both members continuing to work.
This isn't a hypothetical that I pulled out of my ***, it's my step-sister and her husband. So, seriously, how do you count their situation?
When deriving a correction factor for the unemployment rate relative to the workforce-participation rate, how does one differentiate between those who have "stopped looking for work" and those who elect not to work.
Eg: assume a recently married heterosexual couple. Prior to marriage both members of the couple had jobs; one a highly paid career-type position, and the other an hourly-type mid level position.
Shortly after becoming married, the female becomes pregnant. A few months prior to her giving birth, the male (who had the hourly-rate job), loses his job.
The woman gives birth, and the couple decide that she will return to her highly-paid job, while the man becomes a stay-at-home dad.
So, how do you count this? Is the man "unemployed?" Did he voluntarily leave the workforce? One could argue that had he not lost his job prior to the birth, that the couple would instead have elected to use childcare services, with both members continuing to work.
This isn't a hypothetical that I pulled out of my ***, it's my step-sister and her husband. So, seriously, how do you count their situation?
Quick answer: If he's not looking for a job, he's not in the work force.
Under "Limitations of the unemployment definition"
It is possible to be neither employed nor unemployed by ILO definitions, i.e., to be outside of the "labour force." [this is international law, but I add for the concept][29] These are people who have no job and are not looking for one. Many of these are going to school or are retired. Family responsibilities keep others out of the labour force. Still others have a physical or mental disability which prevents them from participating in labour force activities. And of course some people simply elect not to work, preferring to be dependent on others for sustenance.
01-06-2017, 10:07 AM
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