The US economy has not recovered in typical fashion. Following the Great Recession, we witnessed a large growth in those not in the labor force. Part of this has to do with anolder population but that does not address the issue completely. The US has added 16 million people to the ‘not in the labor force’ category over the last decade and this trend has also assisted in padding the unemployment numbers. How so? If you are not in the labor force, you are not counted therefore the rate miraculously drops. It would be one thing if all older Americans were entering retirement age with adequate savings. This is simply not the case. Many Americans are simply broke and their version of retirement includes working until you drop. You would think that things got better since the recession officially ended back in 2009. The opposite is true since 12 million people have dropped out of the labor force within the last five years alone. In other words, the bulk of the people dropping out of the labor force occurred during a labeled recovery.
Taking an exit from the labor force
All things in economics intersect. For example, many people losing their jobs have decided to go back to school to pursue other avenues and careers. With the high cost of college, the student debt bubble continues to expand. These people selectively remove themselves from the workforce. However, a large portion of the growth has come in the form of people losing work and simply not being able to find it again. Many find work with wages that pale in comparison to what they once earned.
This post was published at MyBudget360 on September 13, 2014.
Follow on Twitter
Recent Comments