A follow-up on labor force participation rates

Last week I penned a rather long post about our falling labor force participation rate, and the prolonged pain for the official unemployment rate that that rate seems to predict. I came across a chart that shows an interesting opposite side to the labor force participation coin. What I focused on in my previous post was the "Male, 25-54" demographic, which represents a significant portion of our typical work force. This piece from Tim Iacono takes a look at the very different dynamic within the 55-64 age group.

The report came to my attention via the WSJ Economic Blog’s Number of the Week as some 1.6 million Americans are believed to have put off retirement due to falling asset prices. It’s amazing to think back just a few years when people actually believed that, not only was their rising home equity going to pay for vacations, new cars, and other stuff they really didn’t need, but it was also going to pay for their kids’ college and their own retirement.

Yup, these are indeed strange times we live in. Younger people are so discouraged that they're leaving the work force in droves, while the older generation is so discouraged and/or uncomfortable that they can't afford to do the same (and retire). As always, it'll be interesting to see how this chart plays out over the next couple of years.


[The Mess That Greenspan Made]