More Than Three-Quarters of Workers Missing from the Labor Force Are Under Age 55

A blog post by Pedro Nicolaci da Costa in the Wall Street Journal highlights findings from a paper from the Federal Reserve Bank of Philadelphia that much of the shrinking of the U.S. workforce has been due to workers retiring early, and that given that people who retire early are less likely to reenter the labor force when job opportunities improve, improving economic conditions may not draw these workers back in.

I’ve looked at the breakdown by age of the 5.6 million “missing workers”—potential workers who, because of weak job opportunities in the aftermath of the Great Recession, are neither employed nor actively seeking work. More than three-quarters of missing workers are under age 55 and are therefore unlikely to be early retirees. That means that even if all of the missing workers age 55 and over are early retirees who will never reenter the labor force no matter how strong job opportunities are (a very strong assumption), that still leaves 4.3 million missing workers under the age of 55 who are likely to re-enter the labor force when job opportunities strengthen. In other words, weak labor force participation rate remains a key component of the total slack in the labor market.

Missing Workers

Roughly half of missing workers are of prime working age: Missing workers,* by age and gender, July 2014

 

Missing workers
Men under 25 630,000
Women under 25 420,000
Men 25–54 1,850,000
Women 25–54 1,380,000
Men 55+ 580,000
Women 55+ 1,000,000

* Potential workers who, due to weak job opportunities, are neither employed nor actively seeking work

Source: EPI analysis of Mitra Toossi, “Labor Force Projections to 2016: More Workers in Their Golden Years,” Bureau of Labor Statistics Monthly Labor Review, November 2007; and Current Population Survey public data series

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  • Jerome Bigge

    It appears that we no longer “need” these workers, which is why they are unemployed. The jobs that they used to do have now been replaced by either imported goods or simply found unnecessary by America’s employers…

    • DHFabian

      Yes, they are now part of our “surplus population.” Since the 1980s, we’ve shipped out a huge chunk of our working class jobs. Bill Clinton ended welfare aid in 1996, declaring that, “there is NO excuse” for long-term joblessness. We agreed that any aid provided must be strictly time-limited, to “serve as an incentive to get up every morning and find a job.” Nothing has changed. America has been discarding those not needed by employers for years.