Saturday, February 8, 2014

The Changing Economy


For John, BLUFTh economy is definitely changing and I suspect we don't have a clue.  Nothing to see here; just move along.



From Quartz (A subsidiary of Atlantic Magazine's parent company) we have a short article arguing that US Labor Force Participation Rate is going to be going down.  The author, Mr Tim Fernholz, argues that it isn't just the PP&ACA (Obamacare) that is reducing work hours in our economy and overall labor participation rate.  Mr Fernholz has a chart from the Bureau of Labor of Statistics (BLS) that shows the percent of our population involved in the work force going steadily up from about 58% before 1950, peaking at 68% in the late 1990s and then slopping down to under 62% by 2020.  The sub-headline:— "It’s not just Obamacare.  In the future, we’ll all work less".

There is a lot of experimentation going on with our economy and we are not thinking about the fact that we are out there sailing in uncharted waters.

Regards  —  Cliff

3 comments:

JoeS said...

There are a couple of things that may be affecting the long term labor participation rate: 1)the baby boomers coming of retirement age take a large number of eligible workers off the books, and 2)the "Second Machine Age" (credit to Erik Brynjolfsson and Andrew McAfee)achieving productivity improvement through technology and thereby lessening the role of work in getting things done.

I'm not sure how the first affects the labor participation rate, for if when prople retire they are taking out of the equation the rate may go up, but if they are ledt in the equation the rate will go down.

But the second point is something we may have to accept. Sure, the need for further innovation increases the need for labor participation, but the rate of labor savings through that innovation overwhelms that.

Maybe the 40-hr (+ in many cases) work week will be replaced by less hours work in order to let more participate. Maybe Government is just ahead of the times!

Renee said...

There is nothing left to do.

15 years ago I would agree with a shorter work week, but I'd has become very inefficient to job share knowledge based jobs.

C R Krieger said...

As his Mother used to say, "Another nation heard from".

From Lance:  "Krugman does a thorough job on the "jobs report" that complements your blog."

The word that comes to mind is "invincible ignorance".

Regards  —  Cliff