Or, is it education?
At the outset I want to say that it is very hard to research the question in the title of this blog. Economists spar over this one every day, and I suspect some of the discussion is far more driven by politics than actual factual understanding of what is really happening.
There have even been criticisms of statistical graphs from the US Bureau of Labor Statistics such as the one I showed in several blogs such as this one that show declines in the civilian labor force participation rates for civilians in the US age 16 and over. Critics say much of the decline is caused by the increase in Baby Boomer retirements rather than a real employment problem.
So, I went digging for something that only looked at the employment rate for working age Americans. I found it in the “FRED” data from the Federal Reserve Bank of St. Louis.
Here is the graph.
Baby Boomer retirees don’t impact this rather disconcerting graphic. Even with the Boomers left out, there is a notable decay in the employment situation in the US.
We need to consider this trend when we think about things like how well our education systems are performing and whether recent trends to raise minimum wages around the country are counter-productive, too. Sorting out what exactly is happening is the stuff economists are made of, but the story behind this graph needs explanation, and soon. For sure, Baby Boomer retirement isn’t the answer. Retired Boomers are not even included in these numbers.
Graph Source: US. Bureau of Labor Statistics, Civilian Labor Force Participation Rate: 25 to 54 years[LNU01300060], retrieved from FRED, Federal Reserve Bank of St. Louis, February 8, 2016.