SO, HERE'S MY QUESTION: HOW DO THOSE 12 MILLION ILLEGALS FIT INTO THESE FIGURES?
Baby Boomers, Not Recession, Behind Drop In Workforce
To hear most economists tell it, the prolonged recession has caused millions of Americans to leave the labor force.
(Photo credit: 401K)
Perhaps though there’s another story there. Maybe it’s just the baby boomers.
Baby boomers, the generation born between 1946 and 1964, started reaching the conventional retirement age, 65, last year. That would certainly have many of them leaving their jobs and heading toward the doors. It’s their exit from the labor force that could explain why the labor-force participation rate has fallen from 66% at the end of 2007 to near 63.9% today, a group of Barclays Capital economists argue in a new report. (see charts below)
Just how can baby boomers afford to retire?
Well, the average American is just that: average. He or she belongs to Middle America. They’re mostly reliant on Social Security in their golden years, and don’t have a lot tied up in the equities market, the Barclays Capital economists say. These folks weren’t that badly hurt by the wild swings over the past couple years—where financials like Goldman Sachs and JPMorgan Chase have only recently rallied. And they probably aren’t chasing the next hot tech stocks either. Looking at you, Zynga. (Although a smattering of Apple in any portfolio wouldn’t hurt these days.)
“Clearly, some households are likely not living as well in retirement as they would have if asset prices had continued to make new highs every year or the labor market had not weakened, and the drop in wealth has likely delayed retirement for some households,” the economists, Dean Maki, Troy Davig and Peter Newland, write.
According to the report, just a third of the drop in labor force participation came from those who still wanted a job—and only 15% of those folks are of prime working age, 25 to 54. So, the economists see “the possibility of a large and sudden return of previously discouraged job seekers to the labor force as remote.”
This would be good for the bearish holdouts on the economic recovery.
Those skeptics say the dropping unemployment rate mostly is from a drop in able-bodied people quitting the job search (and lowering labor force participation). And, they say, when the economy does pick back up, those folks will want back in. So, when they re-enter, the falling unemployment becomes the rising unemployment rate.
But if the Barclays economists are right, and the labor-force participation decrease is from baby boomers retiring, then we won’t see a large increase in labor force participation later. Or a rise in the unemployment rate.
Data extracted on: December 9, 2012 (8:23:47 PM)
Labor Force Statistics from the Current Population Survey
| Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Annual |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1990 | 66.8 | 66.7 | 66.7 | 66.6 | 66.6 | 66.4 | 66.5 | 66.5 | 66.4 | 66.4 | 66.4 | 66.4 | |
| 1991 | 66.2 | 66.2 | 66.3 | 66.4 | 66.2 | 66.2 | 66.1 | 66.0 | 66.2 | 66.1 | 66.1 | 66.0 | |
| 1992 | 66.3 | 66.2 | 66.4 | 66.5 | 66.6 | 66.7 | 66.7 | 66.6 | 66.5 | 66.2 | 66.3 | 66.3 | |
| 1993 | 66.2 | 66.2 | 66.2 | 66.1 | 66.4 | 66.5 | 66.4 | 66.4 | 66.2 | 66.3 | 66.3 | 66.4 | |
| 1994 | 66.6 | 66.6 | 66.5 | 66.5 | 66.6 | 66.4 | 66.4 | 66.6 | 66.6 | 66.7 | 66.7 | 66.7 | |
| 1995 | 66.8 | 66.8 | 66.7 | 66.9 | 66.5 | 66.5 | 66.6 | 66.6 | 66.6 | 66.6 | 66.5 | 66.4 | |
| 1996 | 66.4 | 66.6 | 66.6 | 66.7 | 66.7 | 66.7 | 66.9 | 66.7 | 66.9 | 67.0 | 67.0 | 67.0 | |
| 1997 | 67.0 | 66.9 | 67.1 | 67.1 | 67.1 | 67.1 | 67.2 | 67.2 | 67.1 | 67.1 | 67.2 | 67.2 | |
| 1998 | 67.1 | 67.1 | 67.1 | 67.0 | 67.0 | 67.0 | 67.0 | 67.0 | 67.2 | 67.2 | 67.1 | 67.2 | |
| 1999 | 67.2 | 67.2 | 67.0 | 67.1 | 67.1 | 67.1 | 67.1 | 67.0 | 67.0 | 67.0 | 67.1 | 67.1 | |
| 2000 | 67.3 | 67.3 | 67.3 | 67.3 | 67.1 | 67.1 | 66.9 | 66.9 | 66.9 | 66.8 | 66.9 | 67.0 | |
| 2001 | 67.2 | 67.1 | 67.2 | 66.9 | 66.7 | 66.7 | 66.8 | 66.5 | 66.8 | 66.7 | 66.7 | 66.7 | |
| 2002 | 66.5 | 66.8 | 66.6 | 66.7 | 66.7 | 66.6 | 66.5 | 66.6 | 66.7 | 66.6 | 66.4 | 66.3 | |
| 2003 | 66.4 | 66.4 | 66.3 | 66.4 | 66.4 | 66.5 | 66.2 | 66.1 | 66.1 | 66.1 | 66.1 | 65.9 | |
| 2004 | 66.1 | 66.0 | 66.0 | 65.9 | 66.0 | 66.1 | 66.1 | 66.0 | 65.8 | 65.9 | 66.0 | 65.9 | |
| 2005 | 65.8 | 65.9 | 65.9 | 66.1 | 66.1 | 66.1 | 66.1 | 66.2 | 66.1 | 66.1 | 66.0 | 66.0 | |
| 2006 | 66.0 | 66.1 | 66.2 | 66.1 | 66.1 | 66.2 | 66.1 | 66.2 | 66.1 | 66.2 | 66.3 | 66.4 | |
| 2007 | 66.4 | 66.3 | 66.2 | 65.9 | 66.0 | 66.0 | 66.0 | 65.8 | 66.0 | 65.8 | 66.0 | 66.0 | |
| 2008 | 66.2 | 66.0 | 66.1 | 65.9 | 66.1 | 66.1 | 66.1 | 66.1 | 65.9 | 66.0 | 65.8 | 65.8 | |
| 2009 | 65.7 | 65.8 | 65.6 | 65.6 | 65.7 | 65.7 | 65.5 | 65.4 | 65.1 | 65.0 | 65.0 | 64.6 | |
| 2010 | 64.8 | 64.9 | 64.9 | 65.1 | 64.9 | 64.6 | 64.6 | 64.7 | 64.6 | 64.4 | 64.5 | 64.3 | |
| 2011 | 64.2 | 64.2 | 64.2 | 64.2 | 64.2 | 64.1 | 64.0 | 64.1 | 64.1 | 64.1 | 64.0 | 64.0 | |
| 2012 | 63.7 | 63.9 | 63.8 | 63.6 | 63.8 | 63.8 | 63.7 | 63.5 | 63.6 | 63.8 | 63.6 |
Facts and Statistics About the Baby Boomer Generation
The Baby Boomer Generation is generally defined as those born between the years of 1946 and 1964.
Let's see how that breaks down:
- per year: 4,000,000
- per day (4.0 mil / 365): 10,958
- per hour (10.6 k / 24): 456
- per minute (456 / 60): 7.1
If you use 1957 as your base number, when 4,300,000 million boomers were born, that's a heck of a number!
Real Baby Boomers - most of us believe that Real Baby Boomers actually grew up with our most impressionable years being in the 1960's and 1970's and that are today in our 50s and early 60's.
To be fair, some people born on the fringes of this time period, do not think of themselves as Baby Boomers. When we think of the Baby Boomer Generation, we often think of the 60s. That is the decade that seems to have defined the boomers. Many of those born after 1960 have little memory of the greatest decade of the century.
The Birth of the Boomers
So you may argue the fine points a bit, but there is no doubt that there was indeed a population explosion in the years after the war.
The following chart shows the number of U.S. births from 1940 to 1994 in thousands.
For example, in 1940, there were 2,559 thousand (or 2,559,000 - that's 2.6 million) births.
This data comes from the U.S. Department of Commerce, Bureau of the Census.
So you may argue the fine points a bit, but there is no doubt that there was indeed a population explosion in the years after the war.
The following chart shows the number of U.S. births from 1940 to 1994 in thousands.
For example, in 1940, there were 2,559 thousand (or 2,559,000 - that's 2.6 million) births.
This data comes from the U.S. Department of Commerce, Bureau of the Census.
These numbers refer to U.S. births only.
One can easily see a "boom" in 1946, when births went from 2.8 to 3.4 million. The end of the boom is not as clear, however. Perhaps that delineation was marked when annual births dropped below 4 million (1964).
"Every 7 Seconds"
"Every 7 Seconds"
Aanother Baby Boomer turns 50 every 7 seconds. Whew! Is that possible? Well, you don't have to be a math major to check it out.
Let's look at 50 years ago - 1959 - when 4,097,000 Boomers were born. Now, I suppose that some of them have not made it this far, so let's round it down to 4,000,000. (That's just my estimate, but it is close enough for my purposes here.) So, a bit more than 4,000,000 will turn 50 in 2009.
Let's see how that breaks down:
- per year: 4,000,000
- per day (4.0 mil / 365): 10,958
- per hour (10.6 k / 24): 456
- per minute (456 / 60): 7.1
And 7.1 per minute amounts to one every 8.5 seconds.
If you use 1957 as your base number, when 4,300,000 million boomers were born, that's a heck of a number!
For the years 1940-1994, inclusive, 202 million Americans were born; about 77% of all Americans now living were born after 1939.
During the Baby Boomer years, 1946-1964 (inclusive), 75.8 million Americans were born. The ratio of males to females has stayed relatively constant. There were approximately 1.05 male births for every one female birth.
During the Baby Boomer years, 1946-1964 (inclusive), 75.8 million Americans were born. The ratio of males to females has stayed relatively constant. There were approximately 1.05 male births for every one female birth.
The biggest year of the boom was 1957, when 4.3 million boomers were born. Why it took over 10 years for so many post-World War II families to get going is a matter of speculation.
For the 5-year period between 1956 and 1960, inclusive, 21.2 million boomers were born, nearly 1 1/2 times the number born between 1941 and 1945, and the largest for any 5-year period in the 20th century.
For the 5-year period between 1956 and 1960, inclusive, 21.2 million boomers were born, nearly 1 1/2 times the number born between 1941 and 1945, and the largest for any 5-year period in the 20th century.
Boomers today represent 28% of the U.S. population. But in 1964, they represented about 40% of the population. In other words, in 1964 more than a third of the population was under 19 years old! No wonder the baby boomers attracted so much attention.
The Aging of the Boomers
Using the years 1946 through 1964 as boundaries, boomers are now (in 2009) between 45 and 63 years old.
As of 1996, when the Boomers were between 32 and 50, the Census Bureau reported the age of Americans as follows. Again, the number for each age group is in thousands.
Using the years 1946 through 1964 as boundaries, boomers are now (in 2009) between 45 and 63 years old.
As of 1996, when the Boomers were between 32 and 50, the Census Bureau reported the age of Americans as follows. Again, the number for each age group is in thousands.
We are amused when visitors write to us ask what effect the boomers are having on the economy.
Folks, in 2006, the economy was the Boomers! We represented the vast majority of the work force.
(That is not bragging; that is just a statistical reality.)
In 1996, there were approximately 10 million Americans over the age of 80.
Folks, in 2006, the economy was the Boomers! We represented the vast majority of the work force.
(That is not bragging; that is just a statistical reality.)
In 1996, there were approximately 10 million Americans over the age of 80.
There also were 68 million under the age of 20.
Doesn't this constitute another boom? Not exactly. At the time, the "boom" of 78 million Americans born between 1946 and 1964 represented a much larger percentage of the entire population than the 68 million under 20 do now. Nonetheless, in about a decade, 70 million boomers will begin counting on those "kids" to pay our social security. But that's another set of statistics for another time.
The huge growth in the economy in the 90s was due in large part to 76 million Baby Boomers working up to our peak earning and spending years. What are we spending our money on? Other than Metallica CDs and movies aimed at 15 year-olds, whatever is being sold... we are buying it. (And, in fact, we are paying for most of those Metallica CDs and movie tickets, as well.) What kind of cars are we buying?
What kind of cars are Detroit and Japan selling? We are the upper end of the automobile market. What explains the explosion in the popularity of SUVs? We do.
Where do we go on vacation? Everywhere. How do we get there? Every way possible.
What kind of cars are Detroit and Japan selling? We are the upper end of the automobile market. What explains the explosion in the popularity of SUVs? We do.
Where do we go on vacation? Everywhere. How do we get there? Every way possible.
Summary: There were 76.1 million Americans between the ages of 32 and 50 in 1996. That represents about 28% of the U.S population. At the lower end of this range, the number of males is nearly the same as the number of females. But at age 50, there are 1.05 females for every male.
