Goldman Sachs Says A Quarter of Our Labor Market Woes Are About Aging

A blog about business and economics.
Dec. 8 2013 9:56 AM

About A Quarter of the Decline in Labor Force Participation is Aging

1386514251

The unemployment rate has been slowly fallowing for years, but a different measure of the labor market, the so called employment-population ratio, has been dead in the water throughout the recovery. This is the conceptually simplest way of looking at the labor market. You take the number of employed people and you divide by the number of people, thus getting a ratio.

1386514251

But precisely because this concept is so broad and so simple, it can encompass a lot of things other than the business cycle. For example, it's always been the case that a fair number of people in the 55-65 age range are retired. And demographic factors mean that people in that older cohort are now a larger share of the population than they were five or ten years ago. Jan Hatzius, the chief economist at Goldman Sachs, has a chart circulating around that shows the employment:population ratio adjusted for this kind of demographic change.

Advertisement

There are two ways you can look at this adjusted figure. One is to say that relative to peak the vast majority of the decline in work—about 75 percent—is about the business cycle and not about demographics. The other is to look not at the peak but the trough, and say that the appearance that there's been no recovery is essentially all about demographics.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Doublex

Crying Rape

False rape accusations exist, and they are a serious problem.

Scotland Is Just the Beginning. Expect More Political Earthquakes in Europe.

No, New York Times, Shonda Rhimes Is Not an “Angry Black Woman” 

Brow Beat
Sept. 19 2014 1:39 PM Shonda Rhimes Is Not an “Angry Black Woman,” New York Times. Neither Are Her Characters.

The Music Industry Is Ignoring Some of the Best Black Women Singing R&B

How Will You Carry Around Your Huge New iPhone? Apple Pants!

Medical Examiner

The Most Terrifying Thing About Ebola 

The disease threatens humanity by preying on humanity.

Television

The Other Huxtable Effect

Thirty years ago, The Cosby Show gave us one of TV’s great feminists.

There’s a Way to Keep Ex-Cons Out of Prison That Pays for Itself. Why Don’t More States Use It?

Why Men Can Never Remember Anything

The XX Factor
Sept. 19 2014 1:11 PM Why Men Can Never Remember Anything
Behold
Sept. 19 2014 11:33 AM An Up-Close Look at the U.S.–Mexico Border
  News & Politics
Weigel
Sept. 19 2014 5:19 PM Washington's Acting Roles
  Business
Moneybox
Sept. 19 2014 3:24 PM Why Innovators Hate MBAs
  Life
Inside Higher Ed
Sept. 19 2014 1:34 PM Empty Seats, Fewer Donors? College football isn’t attracting the audience it used to.
  Double X
The XX Factor
Sept. 19 2014 4:58 PM Steubenville Gets the Lifetime Treatment (And a Cheerleader Erupts Into Flames)
  Slate Plus
Slate Picks
Sept. 19 2014 12:00 PM What Happened at Slate This Week? The Slatest editor tells us to read well-informed skepticism, media criticism, and more.
  Arts
Brow Beat
Sept. 19 2014 4:48 PM You Should Be Listening to Sbtrkt
  Technology
Future Tense
Sept. 19 2014 5:03 PM White House Chief Information Officer Will Run U.S. Ebola Response
  Health & Science
Medical Examiner
Sept. 19 2014 5:09 PM Did America Get Fat by Drinking Diet Soda?   A high-profile study points the finger at artificial sweeteners.
  Sports
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.