Re: U.S. Adds Only 88,000 Jobs; Jobless Rate Falls to 7.6%
the usual bad news when it comes to jobs.
the labor force participation rate continues to fall. down to 63.3% from 63.5% in feb.
Part of the decline in the labor force participation rate almost certainly reflects the ongoing retirement of the Baby Boom generation. However, part of the rate may reflect structural factors, among others.
To take avoid the noise related to changes in youth deciding to delay entry into the labor force and those reaching retirement age, it makes sense to take a closer look at the ages 25-64 demographic. One finds the following changes in the labor force participation rate for that group:
Ages 25-54: -2.2%
Ages 55-64: No change
Ages 25-64: -2.2%
Ages 25 and older: -2.6% (Age 65 and older has seen labor force participation rise from 16.5% to 18.5%)
Hence, among the core working age population, the age 25-54 group accounts for the entire drop in the labor force participation rate for the larger age 25-64 group.
A look at gender then reveals that males in the age 25-54 group are dropping out of the labor force at a rate 20% faster than women. The 5-year changes in the labor force participation rate for men and women in the age 25-54 group are as follows:
Men: -2.4%
Women: -2.0%
The reasons for the difference are complex. Some factors that are likely relevant, and additional data will be required to really pin them down, include:
1. The trend toward higher education attainment for women relative to men that has been underway over an extended period of time. Females are accounting for a growing share of college graduates (4- and 6-year rates, and advanced/professional degrees) at a rate that is above changes in their demographic representation. In other words, females are becoming more skilled relative to men and that relative change in skills would give them a greater incentive to stay in the labor force.
2. Certain fields in which men accounted for a larger share of employees e.g., construction, had been tied to the housing bubble. Those fields have shrunk since the housing bubble burst and a share of those jobs are not likely to return anytime soon. In contrast, certain fields have been accounting for a relatively larger share of job growth since the economy bottomed out (education and health care, among them). Women have an edge in entering those fields based on ongoing educational attainment trends.
All said, far more important than the headline figure one sees concerning the labor force participation rate, now at its lowest figure since 1979, is the decline taking place in the core working age population. The difference among gender raises anew the growing policy issue of differences in educational attainment between men and women. Should those trends persist, namely should men continue to grow less skilled relative to women, that would have broad labor force and macroeconomic implications. The skilled labor pool would be smaller than it would otherwise be. Put another way, the United States is at risk of becoming less competitive vis-à-vis the rest of the world.
That lack of skilled labor/reduced competitiveness would reduce the nation's long-term growth potential (barring the admission of immigrants or aggressive outsourcing by which companies could mitigate domestic labor force deficiencies). This reduced growth potential would coincide with the demographic change in which the working age population itself is becoming relatively smaller (# of retirees is becoming relatively larger). That outcome has fiscal implications.
In short, the data present just another reason why state and national policy makers need to place greater emphasis on addressing the nation's educational attainment problem (decline relative to other advanced countries; subpar attainment by males). Robust investment, concrete policies, and willingness to innovate will all be required.
